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REPORT 



Committee on Petroleum 



California State Council of Defense 



JULY 7, 1917 




CALIFORNIA STATE PRIXTIXG OFFTCE 
SACRAilFNTO 

1 9 1 T 



31460 






COMMITTEE 



MAX THELEN, Chairman 
ELIOT BLACKWELDER 
D. M. FOLSOM 

D. of D. 
SEP 13 1917 



r 



\ 



CONTENTS. 



Chapter I. 
Letter of Transmittal. Page 

Authority for Report 9 

Scope of Report . 10 

Acltnowleclgments 11 

Chapter II. 
World Petroleum Situation. 

I. World Production 15 

II. Sources of Oil Tributary to Allies 16 

1. United States 16 

2. Russia IS 

3. Mexico Ij) 

4. Dutch East Indies 19 

5. Minor Fields 19 

III. Sources of Oil Tributary to Central Powers 20 

1. Galicia 20 

2. Roumania 20 

3. Minor Fields 21 

IV. Summai'y 21 

Chapter '111. 
California Petroleum Fields. 

I. Location and Description of Fields 23 

1. Kern County II_I__I_I_I_ 24 

Midway Field 24 

Sunset Field ~ 24 

Kern River Field 95 

McKittrick Field I ~_I 96 

Lost Hills Field I ~ og 

Belridge Field 27 

2. Los Angeles and Orange Counties 28 

Whittier-Fullerton Field I 28 

Salt Lake Field I 29 

Los Angeles City Field I 30 

Newhall Field 30 

3. Fresno County "2 3^ 

Coalinga Field -_;-■- I 31 

4. Santa Barbara County '__' ^ 32 

Santa Maria Field . 32 

Summerland Field 34 

5. Ventura County 34 

II. Withdrawals, Restorations and Reservations 3S 

1. Withdrawals and Restorations 38 

2. Naval Reserves 44 

Naval Reserve No. 1 44 

Naval Reserve No. 2 45 

III. Legislation ~_~ 4S 

1. Federal Legislation - 48 

2. California Legislation . 51 

IV. Litigation 52 

1. Southern Pacific Suits 52 

2. Withdrawal Suits 52 

Chapter IV. 
Production of California Petroleum. 

I. General Statement , _ __ _ 67 

1. Discussion of Statistics ~_~ ""_]] 57 

2. Definition of Production Terms g7 

3. Necessary Assumptions g7 

II. Present Production ~_ gg 

III. Production by Districts .; 2 68 

West San Joaquin Valley Fields ~_~ gl) 

Kern River Field gt) 

Whittier-Fullerton Field I ~_ 69 

Southern Coast District !____ 70 

IV. Analysis of Production Figures ~~_ 70 

V. Control of Oil Lands and Pi'oduction [ ~_ 71 

1. Advantage of Operation of Large Units 71 

2. Principal Operating Companies ~ 74 

VI. Summary ~ ~_ 7,- 



4 CONTENTS. 

Chapter \'. 
Storage of California Petroleum. Page . 

I. General Statement 79 

II. Importance of Storage Stocks 79 

III. Classification of Storage 79 

IV. Relation of Storage to Production and Consumption 80 

V. Availability of Stocks 80 

VI. Character of Oil in Storage 81 

VII. Actual Quantity of Available Fuel Oil in Storage 81 

VIII. Location of Oil in Storage 82 

IX. Construction. Coast, and Capacity of Storage 82 

X. Ownership of Storage 83 

Chapter VI. 
Transportation of California Petroleum. 

I. Importance of Transportation 85 

1. Value Dependent on Availability 85 

2. Necessity of Pipe Line in California 85 

II. Control of Pipe Lines 86 

in. Pipe Lines from California Fields 86 

IV. Details of Pipe Lines 87 

1. Line 87 

2. Pumping Stations 87 

3. Cost of Pipe Lines . 88 

V. Operation of Pipe Lines 88 

1. Statement of Problem 88 

2. Operation of Pipe Lines 88 

3. Method of Operation of Hot-Oil Lines 89 

4. Working Capacity of Pipe Lines 89 

5. Present Situation in Pipe Line Transportation 90 

6. Tank Car Shipments 90 

VI. Possible Coordination of Industry 91 

VII. Distribution of Oil 92 

VIII. Summary 93 

Chapter VII. 
Refining of California Oil. 

I. Scope of Investigation 95 

II. Composition and Character of California Oil 95 

III. Basis of Refining Methods and Classification of Products 95 

1. Properties of California Oil 95 

2. Basis of Separation 96 

3. Classification of Refineries 96 

4. Principal Pioducts of California Refineries 97 

I^'. Development of Refining Process 97 

V. Detail of Present Refinery Practice 99 

1. Input -- 99 

2. Separation of Water 99 

3. Distillation of Oil 100 

4. Further Treatment of Distillates 101 

VT. Future Development of Refining Process 102 

1. Increased -Gasoline Output 102 

VII. Casinghead Gasoline 103 

Summary 104 

Chapter VIII. 
Utilization. 

I. Character of Pacific Coast Fuel Situation 105 

II. Development of Fuel Oil Industry 106 

Problem of supplying Pacific Coast with fuel 106 

Proportion of production sold as fuel oil 107 

Proportion of production of refining grade 107 

III. Rapid Growth of Pacific Coast Industries 107- 

Increased use of fuel oil by railroads 108 

Yearly totals of shipments from fields 108 

IV. Utilization of Fuel Oil 108 

Diversity of industries using fuel oil 108 

General distribution of California fuel oil 108-110 

V. Increase in Shipments lOS 

Requirements of Nevada and Arizona . lOS 

Canadian demands ' 110 

Northwestern and Alaskan markets 110 



CONTENTS. O 

Utilization — Continued. Page 

VI. Utilization of Retined Products HO 

Automobile consumption of gasoline : 110 

I'se of lubricants, and shipments to Eastern states 111 

Distillates as motor fuel 111 

Requirements of gas companies foi- gas oil HI 

Present distribution of refined products 111 

VII. Foreign Trade 111 

Effect of great war on general export conditions 111 

California's share of foreign trade 112 

VIII. Increased Future Demand 112 

Industrial ■ 112 

Demand occasioned by the war 111 

Summary HI 

Chapter IX. 
General Review. 
Production and Con.sumption. 

I. Present Production 115 

II. Present Consumption 115 

III. Anticipated Pi'oductioa 115 

IV. Anticipated Consumption IIG 

V. Necessity for Detailed Study of Possibility of Increasing Production or 

]!)ecreasing Consumption lltt 

Chaptek X. 

Future Production — Maintenance and Increase. 

I. Normal Decline of Production 121 

II. Estimate of Increase Required 121 

1. Amount 121 

2. Time 122 

III. How the Increase May Be Provided Within the Time Desired 122 

1. Materials . 12;! 

2. Labor 124 

3. Land . 126 

a. Why the most favorable lands are required 126 

b. Location of most favorable lands 127 

c. Availability of the best lands 130 

(/. Conditions in Naval Reserve No. 2 130 

c. Prudent distribution of drilling __^ 136 

4. Transportation facilities 137 

u. Operators 138 

6. Capital 139 

7. Incentive 139 

IV. Possibilities of Securing the Required Increase 140 

1. Amount 140 

2. Time 142 

V. Summar.v 144 

1. Most favorable lands 144 

2. Agencies of production 145 

3. Necessary arrangements to be made 145 

Chapter XI. 
Conservation. 

I. Diminution of Field Losses 147 

1. Losses incidental to the bringing in of high pressure wells 147 

2. Losses from seepage, evaporation and drainage 14S 

0. Losses due to inefficient field use 14S 

II. Higher Use of Petroleum and Products 149 

1. Burning of unrefined petroleum 149 

2. Improved refining processes 149 

3. Internal combustion engines 150 

4. Automobiles 150 



b CONTKNTS. 

('(insoi-vation — Continued. Page 

III. Substitution of Other Fuel or I'uwer for Caliloniia l'"uel Oil 151 

A. Other Fuel Oil 152 

1. Mexico : 152 

2. Alaska 155 

B. Coal 156 

1. California 156 

a. Sources of coal supply 156 

I). Relative prices of fuel oil and coal 157 

f- California railroads 158 

Southern Pacific Company 161 

Santa Fe 164 

Salt Lake 164 

Western Pacific 164 

Northwestern Pacific 164 

d. Possible conversion of California railroads from fuel 

oil to coal 165 

Southern Pacific Company 165 

Santa Fe 165 

Salt Lake 166 

AVestern Pacific 166 

Northwestern Pacific . 166 

2. 'Phe Northwest 167 

C. Powdered Coal 169 

U. Hydroelectric Energy 169 

E. Natural Gas 173 

IV. Conclusion 177 

Chaptkr XII. 

Conchi.sions and Recommendations. 

I. Conclusions 179 

1. Utilization 179 

2. Production 180 

.3. Consumption 180 

4. Storage 180 

5. Con.servation _: 182 

fi. Tlie Remedy 184 

7. Increased Production — Material 184 

S. Increased Production — Labor 185 

!l. Increased Production — Tlie Land 185 

10. Increased Production — Transportation 188 

II. Recommendations 188 



LIST OK PI>/V1'I<:S. 

I'HAi'TKn II. W'oild t'etiolcuiii SitiiatiMii. i'Auic 

PI;i((^ 1. Map of the VVorkl, showing- oil fields 15 

Plate II. World's Production of Crude IVtroleum, 1890-1916 15 

Plate III. Marketed Production of Crude Petroleum, United States 

Fields 1G 

Piute IV. Comparative Production of Coal and Oil 16 

Plate V. Crude Oil in Storage in the United States, 1914-1917 18 

Chaptbr III. California Petroleum Fields. 

Plato VI. California Petroleum Fields (Map) -I'.j 

Plate VII. Map showing all lands in litigation, and also Naval 

Reserves Nos. 1 and 2 , 41 

CnAPTiOR IV^ I'roduction. 

E»la(e VIII. Pictorial Diagram 07 

Plate IX. Production, Shipment, Storage and Price — California Crude 

Oil, January, 1913-June, 1917 67 

Plate X. I'roduction of Crude Oil in California: San Joaquin Valley 

Fields 69 

Plate XI. Production of Crude Oil in California: Coast and Southern 

Field 69 

Plate Xir. Production and Development of California Oil Fields: show- 
ing output of wells, number of producing wells, and num- 
ber of wells drilling 70 

Pla(<' XIII. Decline in Production: Average Wells, California Fields-- 70 

Plate XIV. Average Daily Production of Oil Wells, California Fields, 

1910-1917 ^ 71 

Plate XV. Annual Production of Light and Heavy Oil, 1909-1916, 

California Fields 71 

CiiAPTEit V. Storage of California Petroleum. 

Plate XVI. Annual Production, Consumption and Storage, California 

Crude Oil, 1906-1917 (from California State Mining 

Bureau) SO 

Plate XVIT. California Crude Oil Storage as per cent of Year's Ship- 
ments 80 

Plate XVIII. Map showing location of Oil in California, May, 1917 82 

Chapter VI. Transportation of California Petroleum. 

Plate XIX. Diagram of P^low of Oil 85 

Chapter VII. Refining of California Petroleum. 

Plate XX. Location of Oil Refineiies in California 96 

Plate XXI. Diagram — Refining of Crude Oil. Showing sources of 

principal products 99 

Chapter VIII. Utilization. 

Plate XXIL Distribution of Fuel Oil. By territory and by use 105 

Plato XXIIA. Distribution of California Fuel Oil (Map) 106 

Plate XXIII. Distribution of Fuel Oil. By use and according to territory 107 
Plate XXIV. Distribution of Fuel Oil. By use and according to territory 107 
Plato XXV. Utilization of Fuel Oil. By industry and territory (Barrel 

Diagram) 108 

Plato XXVI. Analysis of Total Monthly Consumption California Oil 110 

Plato XXVII. Crude Oil Shipments — compared with Railroad Consump- 
tion, 1906-1917 108 

Plate XXVI II. Automobiles in the United States. In relation to their 

fuel supply 110 

Plato XXIX. Distribution of Refmed Products. By Territory, 1916 110 

Plato XXX. Foreign Exports of Crude and Refined Petroleum from 

California Ports 112 

Plato XXXI. United States Crude Oil. Production, Imports, Exports 

and Consumption 112 

Plate XXXI r. Foreign Exports of Crude and Refined Petroleum from 

United State.s, 1906-16 111 

Chapter X. 

Plate XXXIII. Oil Well I'l-oduction, Apiil, 1917. Showing average daily 

production per well for various holds 120 

Plate XXXIV. New Wells Required for Increased Oil Production 126 

Plate XXXV. Average Depth of Wells on Good Land (average, maximum, 

and minimum) 128 

Plate XXXVI. Rate of Drilling. With Rotary and Standard tools 142 

Plate XXXVII. Decline in Gas Pressure. Southern California Well 134 

Plate XXXVIIT. Daily Production of Two Adjoining Wells — Buena Vista 

Hills Field 134 

Plate XXXIX. Daily Production of Two Adjoining Wells — East Coallnga 

Field 134 

Plate XI,. Recent Well Drilling Activity. Average number of wells 

being drilled — California Fields 144 

Chapter XI. 

Plate XM. Hydi-oelectric and Steam Power Development and Water 

Power Resources — Pacific Coast states 170 



LIST OF TABLES. 

Chapter II. World Petroleum Situation. Page 

Table 1. Petroleum Production of the World in ]915 15 

Table 2. Petroleum Production — United States — by fields, by months, I'tll 

to 1916 : 16 

Chapter III. California Petroleum Fields. 

Table 3. Location, Development and Pioduction of the Principal Petroleum 

Fields of California 37 

Table 4. California Petroleum — Field Development and Production, Decem- 
ber 31, 1916 35 

Table 5. Showing Number of Withdrawal Suits, Name of First Defendant, 

Land Affected, Etc 54 

Chapter IV. Production. 

Table 6. Total Pioduction of Crude Oil In California from the begin- 
ning of the industry to December 31, 1916, by fields 76 

Table 7. Production and Development of California Oil Fields at four 

month intervals, from April, 1910, to April, 1917 78 

Table 8. Control of Production of California Oil 79 

Chapter V. Storage of California Petroleum. 

Table 9. Storage Facilities and Stocks of Crude Oil in California 83 

Chapter VI. Transportation of California Petroleum. 

Table 10. Oil Pipe Lines of California 85 

Table 11. Transportation of California Oil 86 

Table 12. Pipe Line Transportation of California Oil from Fields 90 

Table 13. Tank Cars and Steamships Owned or Chartered by Railroads and 

Oil Companies of California 92 

Chapter VII. Refining of California Petroleum. 

Table 14. Oil Refineries and Topping Plants of California 95 

Table 15. Input of California Refineries 98 

Table 16. California Refinery Output 99 

Table 17. Casinghead Gasoline Plants, June 1, 1917, showing companies, 

capacities and disposition 103 

Table IS. Properties of California Petroleum — Physical Properties and 

Possible Refined Products 95 

Table 19. Utilization of Fuel Oil. By territory and by use 105 

Table 2 0. Fuel Oil Distribution by Territory Monthly. By territory and by 

company 105 

Table 21. Total and net consumption of California Oil. Average monthly, 

January 1 to May 1, 1917 --___ 106 

Table 22. Annual and Average Monthly Consumption of Fuel Oil by Pacific 

Coast Railroads, 1906-1917 109 

Table 23. Exports of Petroleum from the United States, 1911-1917 111 

Table 24. Exports of Crude and Refined Petroleum from California 113 

Chapter X. Future Production — Maintenance and Increase. 

Table 25. Men Employed in Field Production of Oil, Who Have Volunteered 

and Registered 125 

Table 2 6. Classification of Preferred Oil Lands in California According to 

Their Present Legal Status 131 

Table 27. Possible Increase in Daily Yield (bbls. ) from California Fields 

Within li Years . 132 

Chapter XI. Conservation. 

Table 28. Receipts of Coal in Tons at San Francisco, 1916 . 156 

Table 29. Fuel Oil Consumption of Specified California Railroads 160 

Table 30. Southern Pacific Company — Fuel Oil Situation — March, April, and 

May, 1917 161 

Table 31. Water Power Resources and Hydroelectric Development of Pacific 

Coast States in Horsepower 170 

Table 32. Steam Plant Installation in Pacific Coast States, Public Utilities 

and Industrial Establishments, in Horsepower 171 

Table 33. Gas and Oil Engine Installations in Pacific Coast States, Public 

Utilities and Industrial Establishments, in Horsepower 172 

Table 34. Production and Distribution of Natural Gas in California, June 1, 

1917, as Reported by Mr. J. F. McMahon 176 



CHAPTER 1. 
LETTER OF TRANSMITTAL. 

San Francisco, California, July 7. 1917. 
To His Excellency, Wm. 1). Stephens, Governor of California. 

Dear Sir : We submit herewith for your consideration the report of 
the Committee on Petroleum of the State Council of Defense. 

This report is presented to you in accordance with request contained 
in your letter of INlay 9, 1917. to the chairman of the committee, reading 
as follows : 

May 9, 1917. 
My Dear Mr. Thelen : 

Permit me to express my a]>preciation of your acceptance of the 
important responsibility of chairman of the Committee of the State 
Council of Defense on Petroleum Oil Production. 

The field of inquiry of your connnittee, as indicated l)y the Com- 
mittee on Scientific- Research, was to obtain the facts relating to 
production, distribution and utilization of petroleum, and to make 
recommendations, (1) as to measures to be taken to meet any 
emergency arising from the present state of war; and (2) the 
increased production and highest utilization of the petroleum 
resources of this state as an integral part of those of the United 
States, having regard to both industrial development and the needs 
of the national government. 

As the matter is one of urgent interest to the .state and nation. I 
would appreciate early effort on behalf of yourself and colleagues 
and as prompt a report as possible to me of the result of your 
findings. 

Sincerely yours, 

Wm. D. Stephens, 

Governor. 

In response to the request contained in your letter, we have used 
every effort to present to you, as promptly as possible, a comprehensive 
and accurate report on the California petroleum situation. We have 
inspected all the petroleum fields of the .state. We have conferred in 
person or by correspondence with officials of the federal government 
both here and in AVashington, with the Committee on Petroleum of the 
National Council of Defense, with the (California State jMining Bureau 
and the State Oil and Gas Supervisor, with all the leading oil com- 
panies of the state and with producers and consumers in general. From 
all the oil companies of the state, small as well as large, we have secured 



W REPORT OF COMMITTP:ii ON I'KTROLEUM. 

valuable data. We have taken advantage of every source of informa- 
tion whieli seemed available in the limited time at our disposal, to the 
end that the facts might be reported to you fully, accurately and fairly 
together with such recommendations as might seem best fitted to meet 
the situation. 

We present our report in twelve chapters as follows : 

Chapter I. Letter of Transmittal. 
Chapter II. World Petroleum Situation. 
A review of the world petroleum situation, with a reference to the part 
played therein by the United States and by the state of California. 

Chapter III. California Petroleum Fields. 
A description of the California petroleum fields with the character- 
istics and productivity of each field ; a statement of the withdrawals 
and restorations of California petroleum lauds, including Naval Reserves 
Nos. 1 and 2 ; a reference to the principal legislation, federal and state, 
affecting the production of California petroleum ; and a review of the 
litigation with the federal government affecting California petroleum 
lands including a reference to such cases as have been decided and 
reported. 

Chapter IV. Production of California Petroleum. 
An analysis and review of the past and present production of petro- 
leum in California, as a whole and by fields. 

' Chapter V. Storage of California Petroleum. 
An analysis and review of the field and other storage of petroleum in 
California and the amount of storage at present available. 

Chapter YI. Transportation of California Petroleum. 
An analysis and review of the transportation situation affecting 
California petroleum and its products with a reference to the availability 
and efficiency of the instrumentalities of transportation. 

Chapter VII. Refining of California Petroleum. 
A study of the processes of the California petroleum refineries, 
including a reference to improved processes of refining. 

Chapter VIII. Utilization of California Petroleum and 
Products. 
An analysis and review of the various uses to which California petro- 
leum and its products are devoted with a reference to the extent and 
locality of such uses. 

Chapter IX. General Review — Production and Consumption. 
A summary of the facts of present production and consumption of 
California petroleum with a reference to anticipated production and 
consumption under present tendencies. 



LETTER OF TKANSMITTAIj. 11 

Chapter X. Production — Maintenance and Increase. 
An analysis of the factors which affect the maintenance and increase 
in the production of California petroleum M'ith a special reference to the 
material, the labor and the lands necessary for increased production, and 
the time in which such increase may be obtained. 

Chapter XI. Conservation. 
A study of the possibility of conserving California petroleum and its 
products by the elimination of field losses, the higher use of petroleum 
and its products, and the substitution of other forms of fuel or power, 
including Mexican petroleum, coal, powdered coal, hydroelectric energy 
and natural gas. 

Chapter XII. Conclusions and Recommendations. 
The committee 's conclusions with reference to the salient facts of the 
California petroleum industry and its recommendations in connection 
therewith. 

AVe respectfully direct your attention particularly to Chapter XII, in 
Avhich chapter we state our conclusions and recommendations. As you 
will observe, we make recommendations on the following subjects : 

1. Increased production. 

2. Decreased consumption. 

3. Presentation of facts to federal government. 

4. Oil well material. 

5. Labor. 

6. Lands in litigation where no receiver. 

7. Lands in litigation in possession of receiver. 

8. Legislation to open petroleum lands. 

9. Transportation. 

10. Ultimate conservation. 

The committee is under obligations to many companies and i)erson8 
who have supplied data and rendered other assistance in our work. 

All the oil companies and oil well supply houses in the state and their 
officers have responded promptly and fully to our requests for informa- 
tion and for other assistance. The local officials of the Department of 
Justice, particularly Mr. E. J. Justice, special assistant to the Attorney 
General; Mr. Frank Hall, special assistant; Mr. Howard M. Payne, 
federal receiver, and INIr. A. G. Nichols have been very helpful in sup- 
plying information and suggestions. 

The committee is under particular obligation to Mr. R. P. McLaughlin, 
State Oil and Gas Supervisor, who prepared a special report on the 
subject of pettoleum lands which are available for increased produc- 
tion ; to ]\rr. J. F. Mt'Mahon and associates, who prepared a special report 
on the natural gas situation; and to Mr. H. F. Jackson and associates 



12 REPORT OF COMMITTEE ON PETROEEUM. 

of the Pacific coast section of the National Electric Light Association, 
who prepared a special report on the availability of hydroelectric 
energy in California. 

Hon. JosephiLs Daniels, Secretary of the Navy; Hon. Franklin K. 
Lane, Secretary of the Interior; Hon. Newton D. Baker, Secretary of 
War: Hon. J. Arthur Elston, congressman from California; ]\Ir. A. C. 
Bedford, chairman of the Committee on Petroleum of the National 
Council of Defense; j\Ir. Van H. Planning, director of the Bureau 
of ]\lines ; ]Mr. C. Naramore, chief petroleum technologist of 
the Bureau of Mines; Mr. E. L. Doheny, chairman of the Committee 
on Oil of the California State Council of Defense ; Prof. John C. 
Merriam, acting chairman of the Committee on Scientific Research of 
the California State Council of Defense ; Prof. Bailey AVillis of Stanford 
I^niversity; Mr. William Sproule. president Southern Pacific Company; 
^Ir. A. G. Wells, general manager, Atchison, Topeka and Santa Fe 
Railway Company, coast lines ; ]\Ir. C. M. Levey, President Western 
Pacific Railroad Company ; ^Ir. W. S. Palmer, president Northwestern 
Pacific Railroad Company ; Mr. H. C. Nutt, general manager Los 
Angeles and Salt Lake Railroad Company; Mr. John A. Britton, vice- 
president and general manager Pacific Gas and Electric Company ; 
.Mr. IL H. Jones, president San Diego Consolidated Gas and Electric 
Company ; Mr. Ralph Arnold and Mr. M. L. Requa, have all rendered 
assistance which has been very much appreciated by the committee. 

We have availed ourselves of a number of published reports, partic- 
ularly the following: 

Bulletin No. 69, California State ^Mining Bureau — Petroleum 
Industry of California. 

Bulletin No. 73, California State Alining Bureau — First Annual 
Report of State Oil and Gas Supervisor. 

Bulletin No. 623, United States Geological Survey — Petroleum 
Withdrawals and Restorations Affecting the Public Domain. 

Conservation of Oil and Gas Resources of the Americas — Ralph 
Arnold. 

Geology and Technology of California Oil Fields — Ralph Arnold 
and V. R. Garfias. 

We desire to express our appreciation to the Railroad Commission of 
California which placed its offices and its expert and clerical force at 
our disposal and particularly to ]Mr. F. Emerson Hoar, the gas and 
electrical engineer of the Railroad Commission, to whose assistance in 



LETTER OF TRANSMITTAL. 13 

supervising the collection and tabulation of data and in rendering 
every possible service we are deeply indebted. 

If we can render any further service, we hope that Your Excellen.-y 
will feel free to command us. We earnestly desire to render every 
possible assistance. 

Eespectfull}' submitted, 

Max Thelen, Chairman , 
Eliot Blackwelder, 
David M. Folsom, 
Committee on Petroleum, State Council of Defense. 





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15 
16 



39,548 
40,000 



Totals 1 427,695,347 



.01 



100.00 



'Marketed procUictlon. =Incliulcs British Borneo. sKstlniated. ■'Barrels of 42 gallons. 



PtfireE 



W0RLP*5 PROPUCTION OF CRUPE PETROLEUM 

In 42-GfiLLOAf B/khels 
/6 90-/9/6 



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CHAPTER II. 

WORLD PETROLEUM SITUATION. 

I. World's Production. 

Althougli oil and gas have been found in small quantities in nearly 
all countries, the commercially productive fields are comparatively 
few and their areas very small. Ralph Arnold estimates that in the 
United States, which is the leading oil producing countr}^ only 0.13 
per cent of the land is underlain by workable oil deposits. 

During the last few years, explorations for new oil fields have been 
carried on more energetically than ever before, even in remote and 
uncivilized countries. For this reason there seems to be but little 
hope that new oil fields of large importance will be found unless it is 
in Russia, or Roumania, or in certain portions of the tropical regions, 
where the obstacles in the way of exploration are the greatest and 
the expense of exploitation high. 

At present, the oil supply of the world is derived largely from a few 
countries, as shown in Table 1 and on the map (Plate I). Changes 
in rank will doubtless occur. The production of the older fields 
may be expected to decrease, while there are possibilities of con- 
siderable expansion in others. Among the latter, the most promising 
are Russia, Persia, Mexico, Burma, the Dutch East Indies and Japan. 
It will be noted, however, that with the exception of Russia and 
Mexico none of the xiountries named below are large producers. 



TABLE I. 
Petroleum production of the world In 1915. 
(Table compiled by U. S. Geological Survey.) 



Country 



Production 
iu barrels'" 



Per cent 
of total 



United States 

Russia 

Mexico 

Dutch East Indies---- 

Roumania 

India 

Galicia 

Japan and Formosa. 

Peru 

Germany 

Trinidad 

Argentine 

Egypt 

Canada 

Italy . 

Others 



1 
2 
3 
4 
5 
6 

8 
9 

10 
11 
12 
13 
14 
15 
16 



281,104,104 


65.72 


68,548,062 


16.03 


32,910.508 


7.69 


12,386,808 


2.90 


12,029,913 


2.81 


8,202,674 


1.92 


4,158,899 


.98 


3,118,464 


.73 


2,487,251 


..58 


995,764 


.23 


==750,000 


.18 


516,120 


.12 


221.768 


.05 


215,464 


.05 


39,548 


.01 


no,ooo 





Totals 427.695,347 



100.00 



'Marketed production. ^Includes British Borneo, sfjstlniated. "Barrels of 42 gallons. 



16 REPORT OP^ COMMITTEE ON PETROLEUM. 

It is a well-known fact that the production of each individual oil 
ti(4d increases and then declines. This is clearly shown on Plate II. 
When once drawn upon, they are comparatively short lived and the 
lotal production of a country is maintained only on the opening of new 
tickls or pools. 

It should be clearly understood that petroleum is a definitely limited 
V resource, that nuich less than half (V. R. Garfias estimates one-fifth) 
of the existing supply can ever be recovered on a profitable basis, and 
that the period of abundant cheap oil on the market will surely pass 
Avithin a comparatively few years. The supply of coal is much larger, 
and coal rather than oil will inevitably be the world fuel of the 
twentieth century, as it has been of the nineteenth. (See Plate IV.) 
All available facts indicate that the use of oil as fr.el must decrease as 
lime goes on. 

II. AS'oH/Tfs of Oil Tribiifarif to flic Allies. 

1. UNITED STATES. 

The preeminent position of the United States at present is shown by 
the fact that it yields nearly twice as much petroleum as all other 
countries combined. Its oil fields are scattered from Pennsylvania 
on the east to California on tlie west and from Montana southward to 
Texas. (See Table 2.) 

The fields east of the Mississippi River, largely in the drainage basin 
of the Ohio, have been great producers in the past, but being the first 
to be developed they are now on the wane. In general, these fields 
give light oils of paraffine base, valuable for refining purposes but of 
little use as fuel. Although small new fields are being discovered from 
time to time, even in thi.s older district, .it seems improbable that they 
will be sufficient to offset the general decline in production. 

The Mid-Continent field, centering in Oklahoma, but with extensions 
in Kansas, Arkansas and northern Texas, has, within the last few years, 
risen from a minor position to second, and finally in 1915, to first place 
among the oil districts of the United States. Most of the oils are rather 
light and rich in gasoline and lubricants ; but as nearly all have an 
asphalt base, the residue from the refining process is used for fuel. 
Although some of the individual pools in this district have been 
remarkably productive, they show symptoms of a more rapid decline 
than those of the eastern fields. Therefore it is to be exi)eeted that 
the production for the entire district will soon decline rather than rise, 
now that the region has been thoroughly surveyed and rather exten- 
sively prospected. It is very significant in this connection that 
although drilling in this field increased about 50 per cent in 1916 as 
compared with 191 5, the production remained practically constant. 



WORLD PETROLEUlVr STTTT.\TION. 



17 




PLf>T£in 



Marketed Propuction of Crupe P etroleum 

UNfT£P Jt^T£3F/£LP5 







n; 



IlKPORT OF rOMMITTRP: ON PKTROI.ErM. 



It is a well-known fact that the production o£ each individual oil 
field increases aud then declines. This is clearly shown on Plate II. 
When once drawn upon, they are comparatively short lived and the 
lotal production ofa country jsmaintained only on the openins: of new 

ficLLiLL '"""■'■■''■II.L ""■"■' 




0> 

\^ 

f 

rem : ^ : '' M 1-4—1 +44- f l^ 

the ^ ^ ^ ^ L4_j_4_v-t-,_+_ 

no\AiiTt ttn ttiitniL.Li 

sively prospected. It is very significant in this connection that 
although drilling in this field increased about 50 per cent in 1916 as 
i-ompared with 1915, the production remained practically constant. 



WORLD PETROLKl'M SIT 




i:as has 
barrels 
ns that 
nwhile, 
line, is 
by the 



PL^renr 



CoMP/iRHTiVE Production of CortL rtNP Oil 

In theUmt£d Srares 
/890-/9/4 




16 



REPORT OF COMMITTEE ON PETROLEUM. 



i^OlTflTfiT 


1 




,.A. 


■ 


i- -ji^ 




, .,.,„. , 







' 












■ 


1 






i-+-- 




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r 

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■ 


" ■ i '. 


'^-^ ' , "^ 






, , - 1 




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■■ - "' ■ ■■ 






tvc 




- 


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- 1 T^ 








■ 






■ 






■ - ' 






























■ - - - - 






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-, , 


-, * ' ' 




'^'~ ~""7 , ,,'-?" 


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- 



















,, _ . . - - , 


















■ 


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^ 


the 1" T j 1 


±1 ii-it-t 


J I . - - 


now _ J ! 1 L 


±T.,^.._ii:^--r 



sively prospected. It is very significant in this connection that 
although drilling in this field increased about 50 per cent in 1916 as 
compared Avith 1915, the production remained p'ractically constant. 



WORLD PETROLEUM SITUATION. 17 

recently 
klahoma 

of small 
Many 
■ a short 
those in 
f during 
and the 
' to the 
I heavy 
s of the 

tah and 
)ming is 
ction is 
le other 
f Mines 
)ols are 
Some 
he light 
s work- 
olorado 
lation a 
lil shall 
oitation 
as they 
}d from 

5 in the 
he next 
lied, or 
ic and 
em by 
as been 
f great 

I'as has 
barrels 
ns that 
nwhile, 
line, is 
bv the 



TABLE 2. 

Jt II ikftcd r,,„liirtiuii III rvlroh-um From I'riiiiiiiii) FUldn of V 
1911-1916. 
(In barrels ol 42 U. S. Kallona.) 









AITALACUIAN. 










LIMA-INDIANA. 






Months 


19U 


1913 


IDIS 


1914 


1915 


1910 


1911 


11112 


1913 


1:111 


i»ir. 


llllO 




1,974,564 
1,884.300 
2,097,297 
1,973.999 
2,162,801 
2,031,036 
1,914,911 
2,033,106 
1,907,735 
1,964,136 
1,834,146 
1,971,371 


1,694,148 
1,834,665 
2,227,769 
2,276,208 
2,462,781 
2.365,033 
2,413,806 
2,442,319 
2,133,327 
2.253,291 
2,033,081 
2,205.868 


2,178,053 
1,982,615 
2,046,832 
2,307,646 
2.251.441 
2,188,242 
2.2.5.3.474 
2.139,441 
2,135,811 
2.237,913 
1,972,899 
2,235.718 


2,104,000 
1,774,000 
2,245,000 
2,271,000 
2,132,000 
2.135,000 
2,212,000 
1,216,000 
1,761,000 
2.830,000 
1,895.000 
2.008.000 


1,899.000 
l,8;i4.1X)0 
2.039.000 

2.ooaooo 

1.883.00O 
1.964.000 
1.945.000 
1.884.000 
1.868.000 
1.831 .oai 
1,788.000 
1.92:3.000 


1,735,IM5 
1.67.5.288 
1.878..543 
1.8.52.47:1 
2.0:1.'). 181 
1.978..5H4 
1.90.5.241 
2.0:34.233 
1.9(XS.U8 
2,045.396 
2,004.037 
1.9.56.706 


541,714 
499,770 
768,873 
514,381 
.545,007 
525,481 
487,953 
505,856 
479,695 
483,435 
419,807 
459,192 


318,785 
308,755 
398,094 
459,811 
481,496 
439,984 
45.5.238 
444.752 
400.677 
437.515 
383.094 
397,705 


409,902 
346,167 
336,321 
427,768 
411,245 
395,032 
401,394 
391,953 
400,905 
424,560 
394,534 
437,857 


451,000 
326,000 
464,000 
465.000 
458.000 
461.000 
459.000 
429,000 
423,000 
420.000 
364.000 
342.000 


3.54,000 
360.000 
388.000 
:396.000 
3.59,000 
374,000 
;161.000 
342.000 
339.000 
345.000 
320.000 
328.000 


;301..5.54 












May — - 


357.042 
346931 


.lulv - 


a31.463 


August 


342,290 
317 500 




326.269 


November 

December 


:305.819 
276.270 


Totals 


23,749,832 


26,338,516 


25,921,785 


24,101,000 


22,861,000 


2:3.009,455 


6,231,164 


4,925,906 


4,773,138 


5.062,000 


4.269.000 


3.905,003 









KANSAS-OKLAHOMA. 










ILLINOIS. 








4.318.348 
4.213.018 
6,471,716 
5.390.151 
5.039,986 
4.783.022 
4.650,295 
4,616.472 
4.532.385 
4.592.925 
4.35:3.926 
4,356.214 


4.092.45:3 
3,944,542 
• 4,191,339 
4.050.241 
4.420.558 
4.142.440 
4.506,106 
4.768.034 
4.487.2,32 
5.014.814 
4.561.139 
4.840.939 


.5.164.640 
4.8.50.793 
5.376.7.53 
.5.451.235 
5.797.368 
5.505.071 
5.514.871 
.5.251.281 
5.397.615 
5.775..581 
5.814,6()9 
6.054.506 


6,073.000 
5,788.000 
7,563.000 
7,536.000 
9,319.000 
9.806,000 
10,67.5.000 
10.600.000 
8.628.000 
9.678.000 
9.612.000 
10.722.000 


11.176.000 
9.11:3.000 
10.58.3.000 
12.174.000 
11.326.000 
11.599.000 
10.425.000 
9.691. 0(« 
8. 639.000 
8.663.000 
8.667.000 
9.864,0(X) 


9.063,1,52 
8,9.59.812 
9.412.700 
9,345,580 
10,708.430 
11,40:3.464 
11.9:31.408 
12.199.747 
12.147.249 
14.267.026 
12.654.813 
12.227.109 


2.578.579 
2.273,229 
2,790,515 
2.560,963 
2,731.965 
2,634..521 
2.740.654 
2,770.946 
2.615.120 
2.638.927 
2.400.670 
2.480.949 


2.241.867 
2.262.440 
2.369.428 
2,351,693 
2.535.039 
2.503.038 
2.698.582 
2,519,651 
2,366.712 
2,424,472 
2,174,a56 
2,153.530 


2.149,264 
1.859.412 
2.008.245 
2,015,058 
2,117,425 
2,003,278 
2.075,444 
2.001.228 
1.442,052 
1,982,002 
1.819,116 
1,921,375 


1,935,000 
1,571,000 
1,970,000 
1,833.000 
1.971.000 
1.932.000 

i.ooaooo 

1.815.000 
1.817.000 
1.813.000 
1.679.000 
1.645.000 


1.614.000 
1.542,000 
1.761.000 
1.613,000 
1.639,000 
1,604,000 
1,637,000 
1..593.00O 
1.535.000 
1..534.000 
1,452.000 
1,487.000 


1,373 615 






March - — 


1,552 827 


April ._ 

Mav - - 


1,396,454 
1 572 217 


June 

Julv 


1.527.589 
1 540 887 


August - — 

September — 

October — 

Xoveinber 

December ___ 


1.561.066 
1.467.892 
1.522.930 
1.454.302 
1.414.440 




57.318.456 


53.019.867 


65.954.413 


106.000.000 


121.920.000 


120.:3.58.637 


31,317,038 


28.601.308 


23,893,899 


21,919.000 


19,041,000 









TIIERN TEXAS. 



NORTU LOUISIANA ( CADDO). 



January 62.361 

February . 55,801 

March ' 60,129 

April 59,946 

May 64,529 

June &1.265 

July 69.153 

August 118.973 

September 155,975 

October 253,155 

November .310.436 

December 298,781 

Totals 1,573,504 



312,319 

304,397 

383,966 

394,327 

469,802 

427,967 

458,701 

454,533 

465,039 . 

535,919 

529,783 

538,776 



626.642 
646.9.i8 
707.308 
774. .509 
848.714 
863.157 
887.324 
936.438 
905.928 
885.865 



5.275,529 1 9,184.252 



952,000 
858,000 
960,000 
860.000 
851.000 
812.000 
849,000 
776,000 
731,000 
716,000 
700.000 
705,000 



627,000 
.565.000 
614,000 
6.58.000 
75.5.000 
679.0<K) 
642.0(XI 
612.000 
607.000 
.591.000 
.581.(KK) 
605.01X1 



9,770,000 ! 7.536.000 



587,537 
.56.3,706 
616.374 
637..5B4 
721. .551 
771.694 
807.934 
79.3.015 
745.8:19 
776.987 
741,205 
737,463 I 



437,546 

348,68:3 

47.5.387 

4:30,1.59 

574,203 

677,403 

711,012 

599.157 

731.306 

791.868 

652,675 i 

566,429 



646.488 

.583.518 

700.594 \ 

648,826 

617.267 

.592.223 

.58:3.805 

.59:3.422 

562.616 

.550.887 ' 

547,612 i 



542,905 
562.86:3 
717,963 
860,274 

968,588 
1,010.049 
953.530 
802,2(X1 
812,062 
905,558 
814,545 
8:31,073 



1.021.000 

851.000 

l.,332.000 

1,091,000 

1,131,000 

l.lll.lXKl 

1.2870110 

1.162.01 X) 

1.129.UU0 

962,(XX) 

S78.()IK1 

855,11(M1 



779.000 
878.000 
1,042,000 
1,1.33.000 
1.239,000 
1.199.000 
1.450.000 
1.6.30,000 
1,539.000 
1,282.000 
1.210.000 
1.185.(XW 



8,500,868 6.995,828 7,177,949 



9,781,560 



J.I-XII 



1.1.51.3.32 

1.04.5.196 

1.096.181 

1.013.691 

1.059,652 

992,.581 

951.405 

882.9.35 

811.648 

802.528 

723.850 

731.196 



11.26.5.195 









coijOB,^ 


,0. 






W^DMINli. 












January 


19.007 
16.299 
19.537 
19,466 
17,259 
16.317 
19.508 
19.570 
19,882 
22,792 
19,924 
17,365 


14.848 
15.310 
17.171 
17.711 
18.008 
16.298 
19.168 
17.503 
17.553 
17,593 
17,119 
17,770 


18,7&'< 
16.09:i 
17.301 
15,44:1 
16,152 
15,919 
15,933 
14,543 ! 
14,908 i 
15,186 i 
14,417 
14,143 f 


16.696 
1.5.563 
16.1:36 
17.986 
17.905 
17.804 
19,934 
20,5.53 
19,829 
20.645 
19,888 
19,.534 


18.282 1 






199.862 


338.069 
2.54,9:« 
3.54..381 
196.834 
248.088 
395.:364 
394,182 
437.165 
372.956 
4,52,994 
388,.540 
412,022 




»bruarv ] 


15.758 
16,:317 






.March ' 


- 


•>:!0 389 




April 


18,024 
1.5.027 
14,022 
17,322 
14..599 
15.907 
16.696 
21.0.56 
25.435 




:!i:(l.249 
:i7(i.2(l7 
2-'l.l!ll 
•i^l :1I0 




Mav 




June 1 




July __. ' 


1 




August 









September 










October 






:I7:!,B29 




November 










December 








:«)0.011 




Totals 


226,926 


206,052 


188,7S9 • 


222.773 


208.475 


190.000 ' *186,695 


1,572.306 


2,406,5 


J2 : 3..560,375 


4.245,525 


6.300.000 








GULP — FlBl.l). 


•Include 


s Utah, 


CAL 


K.llMA.t 


January 

February 

March 


1.152.291 

1,346,180 

1,3.57,389 

1.076.530 

1,048,598 

908,343 

880,446 

829,057 

797,824 

801,353 

707,435 

772,116 


717,938 
741.842 
784.730 
7.52..58;3 
707.766 
684.210 
71:3,912 
700,644 
675,053 
670,532 
684,341 
711,467 


704,90(1 
610,703 
876,33:! 
756,342 
7.57.767 
696,534 
676,24(1 
687,520 
683,939 
678,06(1 
671,789 
742,368 


802.209 
748.-36:3 
1.067,969 
1.227.341 
1.256.762 
1.259.789 
1.12.5.014 
1,139.348 
1.101.204 
1.222.164 
1.014.491 
1,062,874 


1.190.221 
1.423.127 
1.468.660 
1.430.981 
1.247..599 
1.329.922 
1.558.720 
1.486.166 
1.877.680 
2.4.37.192 
2,823,571 
2.303.264 


i 


6,566,180 
5,973,206 
7,089,955 
6.929,337 
7,113,446 
6,694,078 
6,937,862 
7,208,934 
7,291.254 
7,28:3,434 
7.210.297 
7.446.041 


7,627,2.58 
6,893,432 
7,289,498 
7,208,672 
7,333,180 
7,345,702 
7,560,748 
7,694,442 
7,581,285 
8.1.58.814 
7.676.176 
7,705,232 


7,582.3 
7,.302.T 
8,184,81 
7,943,8 
8,098,1 
8,109,9 
8,573,iH 
8,807,1 
8,522,2 
8,163,0 
8,197,9 
8,380,9- 


-- 1 :jl 

,ll,ir;ii 

11 ,-<.(;:w.:i7ii 
s.Tio, 7 12 

II 7.793.130 
■'. 7,775.637 


7.766.364 
6.912.331 
7..568,319 
7,341,080 
7,630.749 
7.458.600 
7.641.544 
7.676.954 
7.370.426 
7.642.763 
7.223.268 
7.334.381 


6.924,272 
6,481.339 
7,552,342 
7.382,909 
7,7:35.305 
7.66:3,549 
8,010,185 
8.04.3.181 
7,965,435 
8.262.111 
7.896.266 
7,935.468 


April 

May _.._ 

June . 

July __ 

August 

September 


i 


October 

November 

December 


-:- 1 




Totals 


11,677,562 


a545,018 


8,542,491 


i:3,117,.528 


20,577.103 




83,744,024 


90,074,439 


97,867,1 


V . 104.471.331 


89.566.779 


91.852.362 






tStandard Oil Company 11 


Bures. Aetna 


well produc 


loo. 





















16 



REPORT OP OOMMTTTEP: on PETROT.EITM. 



'^, 


oi 


r 




- 


- 




- 










„ 


















' 


























r 




..«v 


"' 








t„ 






















'-' 








•• 


^ 




■ 


























- 


- 






... 




















■ 
















! 



~[i"^~ 






... -. . ... 




_____ 


L_ 




' ■ - 


!_, 1 






thai- 

the 

now 

sively p 

although 

compare 



WORLD PETROLEUM SITUATION. 17 

.Mr. Van II. .ManninL.-, chief of the V. S. Bureau of Alines, has recently 
predicted a substantial decrease iu tln^ 1917 production of Oklahoma 
and Kansas. 

The Gulf field in Texas and Louisiana comprises a number of small 
scattered pools, some of whicli have been highly productive. Many 
individual gushers have given thousand.s of barrels per day for a short 
time, but on the whole their decline has been more rapid than those in 
other fields. The production of the entire district has fallen off during 
the last few years in spite of the drilling of many new wells and the 
finding of some new pools, which gave a temporary recovery to the 
])roduction curve. The oil from this district varies from heavy 
asphaltic oils, chiefly useful for fuel, to light pnraffiue-base oils of the 
best refining grades. 

The Rocky Mountain field, comprising Colorado, Wyoming, Utah and 
Montana, has been relatively unimportant until lately, but Wyoming is 
now the scene of the most active prospecting and its production is 
increasing somewhat rapidly. It still, however, falls short of the other 
oil regions in the United States, and the United States Bureau of Mines 
anticipates no further increase in 1917. The individual pools are 
much scattered and differ considerably in their characteristics. Some 
give a heavy fuel oil of asphalt base, while others are more like the light 
oils of the eastern fields. In addition to the petroleum deposits work- 
able under such conditions, there are in Utah, Wyoming and Colorado 
enormous quantities of oil-bearing shale which yields on distillation a 
high-grade petroleum of paraffine base. When the price of oil shall 
have risen to the point (about $3.75 per barrel) where the exploitation 
of those shales becomes profitable, they will doubtless be used, as they 
are now in Scotland, lint at piesent almost no oil is being obtained from 
this source. 

The California field, which for several years has led all others in the 
United States in point of production, is described in detail in the next 
chapters. The production of the state has apparently reached, or 
almost reached, its climax. The oils are nearly all asphaltic and 
although gasoline and other products are derived from them by 
refining and otherwise, about seven-eighths of the production has been 
used for fuel. The possession of this fuel has been a source of great 
wealth to the Pacific Coast States, where coal is relatively scarce. 

In the United States as a whole, the production of oil and gas has 
been slowly increasing up to the past year (about 300,000,000 barrels 
in 1916), but it is now only by the most active drilling operations that 
the inevitable decline is being forestalled. (See Plate III.) IMeanwhile, 
th(^ demand for crude oil and its refined products, such as gasoline, is 
rajudly increasing, and the increase has been accelerated by the 



18 REPORT OK OOMMITTKK ON I'KTKOI .Kl ' M . 

(^ntraiiee of the United States into the world wav. This is sliown by 
1h(> steady deerease in the amount of erude oil which lias been stored in 
the various jnu'ts of the United States largely as a result of the over- 
production of oil during 1!)1-1 (see Plate V). 

]\Ir. L. M. Fanning, writing for the Oil Trade Journal, June, 1917, 
e.stimates that, for llie new navy and luei'chant marine now planned, 
an abnormal eonsnnii)tion of 10,000,000 to 35,000,000 barrels of fuel oil 
alone will be re((uired per yea)'. Thei-e will also l)e a areatly increased 
demand for gasoline and lubricants [\)r use in aei'oplanes and motor 
trucks. 

It is evident that with the consumption increasing and the pi'oduction 
nearly stationary or even decreasing, the stored oil is likely to be 
exhausted within a short time — probably less than two years. The 
United States will then be confronted with a deficit of petroleum prod- 
ucts unless it is able to greatly increase its importations from the only 
available source of importance — Mexico. As a partial offset to this 
unfavorable condition, the production of gasoline from a given amoimt 
of crude oil has been largely increased of late by improved methods of 
i-etining and by the i-ecovery of gasoline from natui-al gas accompanying 
the oil. 

2. RUSSIA. 

The prolific oil fields of Russia are situated in the (*aucasus region 
and especially on Die west shore of the Caspian Sea. A new field of 
considerable promise has lately been opened up on the north shore of 
the Caspian. The many small fields in other parts of the vast empire 
now produce little or no oil. Most of the petroleum is of asphalt base 
and from medium to heavy gravity. In 1901 Russia produced more 
oil than any other country, not even excepting the United States, but 
since that time the production has decreased, not on account of the 
exhaustion of the supply, but mainly because of political, racial and 
social disturbances, which have caused w'idespread destruction of stocks 
and improvements, and have tended to discourage further development. 

In 1913 — the last year preceding the war — about 95 per cent of 
Russia's petroleum output was used in it^ own territory. During the 
war, with the closing of the outlet through the Mediterranean Sea, the 
export trade has doubtless ceased almost entirely. It is evident, how- 
ever, that Avitli the resumption of normal conditions and adequate 
protection for the oil operators after the war, Russia should be able 
to greatly increase her production of oil, and probably her exports of 
its products. It is a fair question, however, whether Russia, with its 
enormous population, will ever have much oil in excess of its own 
requirements. 



WORIjD PETROT>ElTM SITUATION. 



19 



3. MEXICO. 
The known oil fields of JMexieo are situated in the eoastal plain 
bordering the Gulf of Mexico. Being of low gravity, the oil is used 
largely for fuel, but a noteworthy part is refined and the proportion of 




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18 



REPORT OF COAfMlTTEE OX P 



cntrauee of the United States iuto the Mori 
the steady decrease in the amount of ernde o 
the various parts of the United States large 
production of oil during 1914 (see Plate V 



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WORLD PETROLETTM SITUATION. ]9 

3. MEXICO. 

Tlie known oil fields of INIexico are situated in the eoastal plain 
bordering the Gulf of Mexico. Being of low gravity, the oil is used 
largel}^ for fuel, but a noteworth_y part is refined and the proportion of 
this is increasing. According to data published by the United States 
Bureau of Mines, about 60 per cent of the oil in 1916 was exported 
to the United States, and some of the remainder to England and other 
European countries. An increasing quantity is being shipped through 
the Panama Canal to the west coast of South America, where it is now 
helping to relieve the necessity of continuing the exportation of fuel oil 
from California. 

The possibilities for increased oil production in Mexico are large but 
uncertain. Unstable political conditions within the country and the 
insufficiency of transportation facilities for the products exported have 
held development in check within the last few years. It is certain, 
however, that with more active drilling and prospecting in progress 
under an assured economic status, and with ample steamer capacity, it 
would be possible to increase production greatly. The director of the 
United States Bureau of Mines testified before the Senate Committee 
on Public Lands, on June 13, 1917, that the present potential yield of 
the IMexican oil wells was about 1,000,000 barrels a day, or nearly 25 
per cent more than that of the entire United States. 

4. DUTCH EAST INDIES. 

In spite of the natural obstacles to exploitation, Java, Sumatra, 
Borneo and certain adjacent islands have lately been furnishing a con- 
tinuall}- increasing supply of petroleum. Most of the oils are of rather 
high grade, with a paraffine base, and are used chiefly for refining 
purposes. Before the war, the products were marketed principally in 
the Oriental countries, but lately the supply has been so largely 
diverted to Europe for the use of the Allies that in 1915 England 
o])tained more gasoline from the Indies than from the United States. 

We are reliably informed that these islands contain important areas 
as yet unprospected and that an increasing production may be expected 
from them for a number of years to come. The natural difficulties of 
the tropics, however, will probably prevent a rapid development. 

5. MINOR FIELDS. 

In addition to the countries which have been mentioned, about eight 
or nine others, which are accessible to the Allies in the present war, 
produce sixteen or more million barrels of oil annually, or less than half 
as much as ^Mexico. In most cases the yield is insufficient for domestic 
consumption and hence the majority of these countries are importers 



20 REPORT OK COMMITTEE ON PETROLETM. 

of petroltHini produrts. With refeiviiee to the war they are of neg- 
ligible importance. The only important exception to this seems to be 
Trinidad, whieli now exports nearly one million l)arrels a year, chiefly 
to England. 

For the fntnre, there are ]>rospeets of a eonsidi-ralile increase in the 
nnmber of wells and in the oil prodnced in Japan, Persia, and, ])erhaps, 
Pern; and some other countries such as Venezuela and Coloml)ia have 
recently become small i)roducers; lint there is as yet no as-;urance that 
any of these nations will ever tigur-e largel\- in the petroleum industry. 

III. Sniircrs of Oil TrihuUvji to fJi< Cvtilral Poiccrs. 

1. GALICIA. 
The oil wells along the north side of the C'arpathiai; ^lountains have 
for many years yielded rather high-grade oils of paraffine base. During 
the past decade the production has been declining until it reached about 
7,000,000 barrels a year at the outbreak of the war. During the war, 
(ralicia has been a battle ground, and regarding its ])resent condition 
there is little definite information available. Althoni>h the Aastro- 
Germans, in whose hands the territory largely rests at present, have 
doubtless tried to obtain the maximum production, it is safe to presume 
that nnich destrnetion has already l)een wrought. It seems probable 
that Galicia will, after tlie war, continue its decline as a producer of oil. 

2. ROUMANIA. 

The well-known Roumanian oil fields are really an extension of the 
Galician fields southward along the convex curve of the Carpathian 
foothills. The oils are varied in character, with the lighter varieties 
predominating. Just before the outbreak of the war Roumania was 
exporting about 65 per cent of the petroleum produced. The fuel oil 
and residues were consumed largely within Roumania, while the exports 
consisted chiefly of the lighter refined products, and were marketed 
especially in the countries of Avestern Euroi)e. 

By their astonishingly rapid conquest of the counti'y, the Centi-al 
Powers were able to seize nearly all of the oil-producing territory. It 
is reported that many of the wells were not seriously damaged., but on 
the other hand an American engineer recently returned from Roumania 
states that most of the wells were plugged and cemented by their owners 
in .such a way as to necessitate complete redrilling. It is obvious, in 
either event, that the Teutonic Powers are making every effort to 
restore the productivity of this field. It is doubtful, however, whether 
they can have yet more tlian partly succeeded. We are credibly 
informed that there is much jn-oductive oil land in Roumania which 
has not been effectively prospected, and hence some increase in produc- 
tion after the termination of the war may be rea.sonalily expected. 



WORLD PKTKOLKUM SITUATION. 2] 

3. MINOR FIELDS. 

Relatively small (juantities of petroleum are prodiu-ed in Germany 
and Hungary, but the fields have been thoroughly tested and ofit'er no 
prospects of considerable increase, but rather of the inevitable falling 
off of old fields. 

IV. Suiiiniarif. 

So far as increase of oil production for the Allies during the war is 
concerned, we need consider only the United States and JNIexico, with 
the possible addition of the Dutch East Indies and Trinidad and per- 
haps Venezuela. In the United States some of the oil fields are 
incurably on the decline, others near their climax, and still others on 
Ihe ascent. As a whole, the production of oil in this country appears to 
have nearly or quite reached its maximum and to be just entering upon 
its period of decline. At present the tying up of a large acreage of 
oil lands in California and Wyoming by federal suits, the inadecpiacy 
of transportation facilities in Wyoming, and in many other fields the 
difficulty of obtaining the necessary materials for drilling, are tending 
to obstruct the stimulation of production, which otherwise might be 
effected. If these handicaps could be removed in the near future it 
would permit a considerable addition to the oil production of the 
country, probably more than enough to offset the normal decrease, at 
least for the period of the war. 

Mexico is far from producing the quantity of oil that is available. 
This condition has been partly due to the chaotic political state of the 
country, the heavy taxation of the oil companies, and the uncertainty 
as to the future actions of the government. Even under present condi- 
tions the production of the existing wells is being greatly restricted 
because there are not enough tank steamers and tank cars to transport 
the products to market. 

leasing estimates on the figures for 1915, Imt taking into account the 
present positions of the European battle fronts, the Allies appear to 
control about 96 per cent of the world's total production. The advan- 
tage is not, however, so great as it might appear, inasnuich as the 4 
l>er cent controlled by the Central Powers is all within their own battle 
lines, while on all fronts except the Russian the Allies are obliged to 
transport their petroleum supplies across seas infested with German 
submarines, which ai-e taking a heavy toll from the available supply of 
tank steamers. In this instance, the problem of transportation is even 
more serious than that of oil production. 



CHAPTER III. 

CALIFORNIA PETROLEUM FIELDS. 

In this chapter we shall make a general survey of the California 
petroleum situation Avith reference to the following subjects : 
I. Location and Description of Fields. 
II. Withdrawals, Restorations and Reserves. 

III. Legislation. 

IV. Litigation. 

I. Local ion and Dcscripfiox of Fields. 

The proved petroleum fields of the state ma}', with minor exceptions, 
be classified as follows : 

San Joaciuin Valley fields. 

Los Angeles-Orange County lields. 

Coast fields. 

The San Joaquin Valley fields are generally classified as the West 
Side fields, being, from north to south, the Coalinga field, the Lost Hills 
field, the Belridge field, the IMcKittrick field, the Midway field and the 
Sunset field; and the Kern River field. 

The Los Angeles-Orange County fields, in order of productivity, are 
the Whittier-Fullerton field, the Salt Lake field, the Los Angeles City 
field and the Newhall field. 

The Coast fields are located in Santa Barbara and Ventura counties. 
In Santa Barbara county are the Santa ]\Iaria, Lompoc, Summerland 
and Casmalia fields. The Ventura county fields consist of a number of 
small and entirely separate oil fields, principally located in the Santa 
Clara Valley. 

AVe shall now refer to each proved petroleum field of importance in 
California, grouping the same for convenience by counties, and stating 
with reference to each field its location, its area, with acreage of proved 
territory, the year of initial and first active development, the produc- 
tivity of the field, the characteristics of the field with reference to depth 
of wells and gravity of oil and the present number of producing wells. 
The characteristics of the various fields with reference to natural gas 
will be set forth in Chapter XI of this report. The counties, in order 
of productivity, are Kern, Los Angeles and Orange, Fresno, Santa 
Barbara and Ventura. 

A map showing the California petroleum fields is attached to this 
report as Plate VI. 



24 REPORT OF COMMITTEE ON I'ETROLELM. 

1. KERN COUNTY. 
Midway Field. 

The ^Midway tieUl is the most productive petroleum Held iu Cali- 
foruia and one of the most productive in the United States. 

This tield is situated in the wtisteru portion of Kern County, along 
the northeasterly base of the Temblor Kange. between the Melvittrick 
tield en the north and the Sunset Held on the south. The lx)\nidary line 
between the ^lidway and the Sunset Helds is the south line of town- 
ship 32 south, ranofes 2)^ and 24 east. 'SI. D. ]M.. which line is also the 
north line of township 12 north. I'anges 23 and 24 west. S. H. M. 

The ^Midway field has a total area of approximately To stpiare miles 
and a proved oil territory of approximately 47.000 acres. The proved 
territory referred to in this chapter includes in each instance territory 
generally considered proved, between the main fields and the (mtlying 
wells. 

Development in the Midway field commenced in 1900. Heavy pro- 
duction conunenced in 1909. Production has increased from 4.235 
barrels, in 1901. to 32.156,818 barrels in 1916. The greatest production 
was in 1914. in Avhich year 37,479,228 barrels were produced. In 1915. 
due to litigation with the federal government, following the withdrawal 
orders, there was a sharp decline to 33.040.129 barrels. 

The total production from 1900 to December 31. 1916, has been 
197.580.255 barrels. 

The depth of the wells in tlu' Midway Held varies from 500 to 4.000 
feet. As a general rule, the upper sand is thicker and carries oil 
under 18 degrees Baume. Avhile the lower sand is in most places less 
Ihan 100 feet thick, produces oil lighter than 18 degrees Baume and 
frequently has gas pressure of several hundred pounds. 

The gravity of the oil in the ^Midway field ranges from 13 degrees 
Baume to 30 degrees Baume. Approximately 40 per cent of the oil 
is of 18 degrees Baume or lower, the remaining 60 per cent being higher 
than 18 degrees Baume. 

On December 31, 1916, there were approximately 1,710 producing 
wells in the combined area of the ^1 id way field and the Sunset field, 
next hereinafter referred to. On ]\Iarch 1, 1917, there Avere 1.420 
producing wells in the ^Eidway field alone. 

Sunset Field. 
The Sunset Held is an extension southeasterly of the ^Midway field 
along the northeasterly base of the Temblor Range, in the western part 
of Kern County. 



CALIFORNIA PETROLEl'M FIELDS. 25 

Tile Sunset field has an area of approximately 15 square miles, witli 
a proved acreage of approximately 0.500 acres. 

The first well in llic Sunset field was drilled in 1S91 and systematic 
development was begun in 18f»4. The district t)eeame commercially 
important in 1900. in which >ear it contained 18 producing wells. 

The production increased from 12,500 harrels in 1900 to 6,768,658 
barrels in 1916. The maximum i)r()duction was in 1914, in which year 
12,546,615 barrels were produced, this production being practically 
double the production of 1918 and of 1915. Due to the enormous pro- 
duction of the Lakeview gusher, the production rose from approximately 
2,000,000 barrels in 1909 to 9,218,904 barrels in 1910. 

The total production of the Sunset field from 1900 to December 31. 
1916, was 57,681.754 barrels. 

The wells in the Sunset field vary in dei)th l)etween 400 and 3,000 
feet. A number of unsuccessful wells have been drilled to a depth in 
excess of 5,200 feet in the region east of the producing territory. 

The gravity of the oil varies from 11 degrees to about 26 degrees 
Baume. Approximately 50 per cent of the oil is under 15 degrees 
Baume. The lighter oil, ranging from 13.5 to 26 degrees Baume, is 
found in the deeper wells in the northern end of the field. 

As already indicated, the number of producing w'ells in the ^Midway 
and Sunset fields combined on December 31, 1916, was 1710. On 
^larch 1, 1917, the number of producing wells in the Sunset field alone 
was 342. 

Kern River Field. 

The Kern River field lies on the low rolling hills at the foot of the 
Sierra Nevada Range, on the eastern rim of the San Joaquin valley, 
approximately 4^ miles northeast of Bakersfield, Kern County. 

The development of the Kern River field marked the beginning of 
California as a factor in world production of petroleum. 

The area of the Kern River field is approximately 12 s<juare miles, 
with a proved acreage of 7,900 acres. 

The first Avell was drilled in June. 1899. By September, 1900, there 
wei-e 134 completed wells in the field. The production has increased 
from 826.775 barrels in 1900 to a maximum of 17,226,240 barrels in 
1904. Since 1904, the production has gradually decreased until in 
1916 the production was 8,402,525 barrels. 

The total production from 1900 to December 31, 1916, was 190,149,600 
liarrels. In point of total productivity to date, the Kern River field 
ranks second onh* to the JNIidwav field. 



26 KIOl'OKT OK COMMITTEE ON PETROLEUM. 

The wells in the Kern River field vary in depth from 400 to 1,200 
feet, with an average of approximately 900 feet. The producing sands 
range from a thickness of 200 feet to 500 feet. 

The gravity of the oil varies from 10.4 to 17 degrees Baiime, with an 
average of about 14 degrees. The oil from this district is used mainly 
for fuel and the manufacture of asphalt. 

On December 31, 1916, there were 1,908 producing wells in this field. 
The number increased by IMai-eh 1. 1917, to 1946 wells. 

McKittrick Field. 

The McKittrick field is located in the western portion of Kern 
County, about five miles northwest of the Midway field. 

The McKittrick field has an area of approximately four s(iuare miles, 
wilii a proved acreage of 1,650 acres. 

The McKittrick field was one of the first fields in which petroleum 
was produced in California. Development commenced in 1866, and at 
(irst consisted largely in mining for asphalt. The first successful well 
was drilled in 1892, but the first production of importance was 10,000 
barrels in 1898. In 1900 there Avere 16 producing wells and seveu 
drilling wells, with a total production for the year of 80,000 barrels. 

The production increased steadily until it reached its maximum with 
5,807,360 barrels in 1909. Since 1909 the production has gradually 
decreased. In 1916 the total production was 3,230,644 barrels. 

The total production of the McKittrick field from 1898 to December 
31, 1916, has been 48,862,217 barrels. 

The wells in thG IMcKittrick field vary in depth from 400 feet to 1,800 
feet, Avith an average depth of 1,200 feet. 

The gravity of the oil in the northern portion of the field ranges 
from 12.5 degrees to 21 degrees Baume, w^ith an average of 15 degrees 
or 16 degrees Baume ; in the central portion of the field, the gravity 
ranges between 12 degrees and 24 degrees Baume. Avith an average of 
15 degrees to 17 degrees Baume; and in the southern portion of the 
field the gravity of the oil is fairly uniform at about 18 degrees Baume. 
In the valley and in the hills north of McKittrick Valley the gravity is 
approximately 12 to 14 degrees Baume. 

On December 31, 1916, there Avere 293 producing Avells in the Mc- 
Kittrick field. Tlie number Avas the same on March 1, 1917. 

Lost Hills Field. 

The Lost Hills field is located in the Avestern portion of Kern County, 
approximately 50 miles southeast of Coalinga. The dcA^eloped territory 



CALIFORNIA PETROIiEUM FIELDS. 2/ 

extends along a narrow strip of territory having a length of approxi- 
mately six miles and a width varying between 2,000 and 4,000 feet. 

The proved area of the Lost Hills field and the Belridge field combined 
is reported to be 4,200 acres. 

The first well in the Lost Hills field was drilled in July, 1909. The 
first discovery of importance was the Martin and Dudley well, which 
was completed in the summer of 1910. 

The production increased from 4,900 barrels in 1910 to a combined 
production of 5,274,553 barrels for the Lost Hills and Belridge fields in 
1913. In 1916 the combined production of the Lost Hills and Belridge 
fields was 4.852,431 barrels. 

The combined production of the Lost Hills and Belridge fields from 
1910 to December 31, 1916, was 22,130,726 barrels. 

The wells in the Lost Hills field range from 500 to 2,000 feet in depth. 

Tlie gravity ranges from 15 degrees to 38 degrees Bauine. In the 
southern portion of the field the oil ranges from 30 degrees to 38 
degrees Baume. 

On December 31, 1916, there were 350 producing wells in the Lost 
Hills and Belridge fields combined. By March 1, 1917, this number 
had increased to 376 wells. During the month of March, 1917, 18 pro- 
ducing wells were added to the number, this number being second only 
to the 20 additional producing wells completed during March, 1917, 
in the ]\Iidway field. 

Belridge Field. 

The Belridge field is located in western Kern County, between the 
Lost Hills field to the north and the McKittrick field to the south. The 
proved territory is located in two separate areas. 

The Belridge field has a width of between one-fourth to one-half mile 
and a length of about three miles, Avith a proved acreage for this field 
and the Lost Hills field together amounting to 4,200 acres. 

Development in the Belridge field began in 1911. Practically the 
entire production in this field comes from the upper zone, in which the 
wells vary in depth from 600 to 900 feet. The lower zone, consisting 
of brown shale, is reached by wells having a depth of approximately 
4.000 feet. 

The production of the Belridge field has been combined with the 
production of the Lost Hills field in the description of the latter field 
hereinbefore given. 

On June 1, 1916, there were 86 producing wells in the Belridge 
field. 



28 REPORT OF COMMITTEE ON PETROLEUM. 

2. LOS ANGELES AND ORANGE COUNTIES. 

By reasou of very largely increased prodnetion iu the Wliittier- 
Fullerton field, Lo.s Angeles and Orange counties now rank second 
among the counties of California in the production of petroleum. In 
order of productivity, the petrolenin fields of Los Angeles and Orange 
counties are as follows : 

1. Whittier-Fullertou held. 

2. Salt Lake field. 

S. Los Angeles City held. 
4. Newhall field. 

Whittier- Fullerton Field. 

The Whittier-Fullerton held is located in the eastern portion of Los 
Angeles County aiul the northwestern portion of Orange County. 

This held is at times further segivgated into a numher of helds which, 
in order of present productivity, are as follows: Coyote Hills. La Ilabra, 
Hrea Canyon (or Fullerton). Olinda. Whittier. Baldwin (or La ]\[erced) 
and Puente. 

The field covers an area of approximately 15 s([uare miles, with a 
j)roved acreage of approximately 5.000 acres. 

The hrst pi'oduction of consequence in the Whittier-Fullerton held 
was in 1897. in which year 12.000 barrels were produced. The produc- 
tion has steadily increased until in l!)l() it amounted to 14.H79,672 
barrels. 

The total production from 1897 to December 31, 1916, was 97,428,665 
barrels. In March. 1917, the daily production of the AVhittier-Fullerton 
held of 47.455 barrels was surpassed only ])y the daily production of 
81,641 barrels of the ^Midway field. 

The daily production as of May 1. 1!)17. of the various helds which 

constitute in the aggregate the Whittier-Fullerton field Avas as follows: 

Coyote Hills lielcl 20,483 banols 

La llabia field 10.76(> barrels 

Brea Canyon (or Fullerton) field G.ol4 barivls 

Olinda field o.i)o(J barrels 

Whittier field 2.893 barrels 

Baldwin (or La Alerted) field oi.j barrels 

Puente field GG bari'els 

The characteristics of the various smaller helds which in the aggre- 
gate constitute the AVhittier-Fullerton held dih'ei- with reference to 
depth of wells, gravity of oil and other characteristics. 

The wells range in depth from the shallow wells of the Puente field, 
having a depth of from 700 to 2.300 feet, to the deep wells of the 
Coyote Hills field, having a depth of from 3.500 to 5.000 feet. The 
gravitv of the oil ranaes from 14 degrees to 15 degrees Baume in some 



CALIFORNIA PETROLETM FIELDS. 29 

Holds to in exeeas of ^^o dcfj^rci's Haume. in the Coyote Hills and Brea 
Canyon fields. 

On December 31. 1J)1<). tliere were 637 producing welLs in the Whittier- 
Fnllerton field. 

On ]May 1, 1917, there were 665 prodncing' wells, a.s follows: 

Coyote Hills field HT 

La IIiil)ia field llC 

Brea Can.von field 91 

Oliiida field 22(; 

Whittier field IKi 

Baldwin field 1 

I'uente field 58 

Gftrs 

It may be noted Ihat the 57 wells producing in Coyote Tlills field 
averaged in ^lay. 1017. a (lail\' production of 360 barrels each. 

Salt Lake Field. 

The Salt Lake field includes the territory lying between tlie Avestern 
city limits of the city of Los Angeles and the Pacific Ocean. This field 
is located about two miles to the soutli of the base of the Santa INIonica 
.Mountains and slopes gently to the south and west. 

The Salt Lake field has an area of approximately two s(|uare miles, 
with a proved acreage of approximately 1,200 acres. 

The finst well in the Salt Lake field was drilled in 1901. No definite 
record of production prior to 1906 is obtainable for the reason that up 
to 1906 the Salt Lake field was generally considered as part of the 
Los Angeles City field. In 1906 the production of the Salt Lake field 
was 2,435,530 barrels. The maximum production was 4,535,800 barrels 
in 1908. Subse(pient to 1908, production has slowly decreased, until 
in 1916 the Salt Lake field combined with the Los Angeles City field 
jn-oduced only 1,721.453 barrels. 

The combined production of the Salt Lake field and the Los Angeles 
City field from 1894 to December 31, 1916, was 51,400,532 barrels. 

The wells in the Salt Lake field range from a depth of 800 to 3,000 
feet, the average depth of the producing wells being approximatelv 1,725 
feel. 

Th(» gravity of the oil in this field ranges from 10 degrees to 25 
degrees Baume. 

The total number of producing wells in the combined Salt Lake 
and Los Angeles City fields on December 31. 1916, was 674 and on 
March 1, 1917, 673. On March 1, 1917, the total number of producing 
wells in the Salt Lake field was 273. 



30 REPORT OP COMMITTEE ON PETROLETM. 

Los Angeles City Field. 

The Los Angeles City field consists of a narrow belt about five and 
one-half miles long running through the northern portion of the city 
of Los Angeles. 

The proved area in this field comprises some 1,400 acres. 

The presence of oil and gas in the city of Los Angeles was known at 
an early date. In 1865 a well sunk near Temple street produced some 
gas. The first producing oil well in the city of Los Angeles was drilled 
in 1892 by Doheny and Cannon, at Second Street Park. By the end of 
1895 there were more than 300 producing wells in the city of Los 
Angeles. The total production in 1894, the first year of active develop- 
ment, was 257,109 barrels. In 1895 the production increased to 751,945 
I)arreLs, being at the rate of six or seven barrels per well per day. By 
1916 the number of producing wells decreased to approximately 400, 
and the production for 1916 combined with that of the Salt Lake field 
was 1,721,453 barrels. 

The wells in the Los Angeles City field vary in depth from 500 to 
1,200 feet. 

The gravity of the oil ranges from 12 degrees to 19 degrees Baume. 
This oil is of little value for refining, but is used as fuel oil in the local 
market. 

On March 1, 1917, there were 400 producing wells in the city of Los 
Angeles. No additional wells are being drilled. 

Newhall Field. 

The Newhall field is located in Los Angeles County, approximately 40 
miles northwest of the city of Los Angeles. This field is frequently 
classed with the Ventura County fields for the reason that it is located 
in an extension of the Santa Clara Valley, which is principally located 
in Ventura County. 

Included in the Newhall field are the Pico Canyon, Wiley Canyon 
and Elsmere Canyon fields. 

The proved territory in the Newhall field has been roughly estimated 
at about 540 acres, but close figures are impossible because of the 
character of the country and the fact that the groups of wells are small 
and widely scattered and have very little apparent connection with one 
another. 

Development in the Newhall field began in 1875, with the drilling of 
three shallow wells in Pico Canyon. In 1880 the output was 40,500 
barrels. In 1895 approximately 35 wells yielded an annual production 
of 150,000 l)arrels. In 1910, 75 producing wells yielded an annual out- 
put of 160,428 barrels, the largest output in the history of this field. 



CALIFORNTA PETROI.ET^M FIELDS. 31 

In March, 1917, the total production Avas 11.574 barrels, being an 
average production of 4.6 barrels daily per well. 

The total combined production of the Newhall and the Ventura 
County fields from the beginning to December 31, 1916, was 18,738,338 
barrels. Separate figures for the Newhall field alone are not available. 

The depth of the wells in the Newhall field varies from 700 to 1,600 
feet, with an average depth of less than 1,000 feet per well. 

The gravity of the oil in this field varies greatly from 11 degrees to 
38.7 degrees Baunie. The average gravity of the oil in Pico Canyon is 
i:pproximately 38 degrees Baume, in Wiley Canyon 30 degrees Baume, 
and in Elsmere Canyon 14 degrees Baiime. 

On December 31, 1916, there were 80 producing wells in the Newhall 
field. On March 1, 1917, there were the same number of producing 
wells, with one additional well being drilled. 

3. FRESNO COUNTY. 
Coalinga Field. 

The Coalinga field is located in the southwestern portion of Fresno 
County and the western portion of Kings County. The field has a total 
area of 750 square miles, but the proved oil land has an area of only 
17,500 acres and is located entireh' in the foothill region around 
Pleasant Valle}^ in Fresno County. 

The Coalinga field is subdivided into three smaller proved fields known 
re.spectively as the Oil City field, lying on the crest of the Coalinga anti- 
cline at the north end of the field ; the Eastside field, lying on the crest 
and on the east flank of the Coalinga anticline and forming the north- 
eastern portion of the Coalinga field, and the Westside field, lying on 
the western flank of the Coalinga syncline in the western part of the 
field. Petroleum, but not in commercial quantities, has also been found 
in isolated spots in other portions of the Coalinga field, known as 
Kettleman Hills, Kreyenliagen Hills and Jacalitos Canyon. 

The first successful well in the Coalinga field was completed in 1890 
in the Oil City field. Development in the Eastside field began with the 
drilling of a number of wells in 1900. In the Westside field, successful 
development work was begun in 1901 and by the fall of 1906 the pi-esent 
limits of the field had been ascertained. 

The production in the Coalinga field increased rapidly from 14,119 
I)arrels in 1896, until in 1912 it reached 19,546,122 barrels. The pro- 
duction in 1916 was 14,381,493 barrels, this being an increase of approx- 
imately 800,000 barrels over 1915. The increasing production in the 
Coalinga field is principally from the Eastside field. 



32 REPORT OP COMMITTEE ON PETROLEUM. 

The total production of the Coalinga field from 1896 to December 
31, 1916, was 180.934,188 barrels. 

In point of total production to date, the Coalinga field ranks third 
among California petroleum fields, being exceeded only by the ]\Iidway 
and the Kern River fields. In point of present production, the Coalinga 
field likewise ranks third, being exceeded only by the Midway and the 
Whittier-Fiillerton fields. 

The wells in the Coalinga field range in depth from 300 to 4,700 feet 
and the gravity of the oil from 12.4 degrees to 35.5 degrees Baume. 
The well depths and the range of gravity in the three proved fields are 
as follows : 



Depth of wells 
In feet 



Gravity in 
degrees Bauma 



Oil City 300 to 1,700 34.5 to 35.5 

Eastsido 700 to 4,700 17.6 to 30.7 

Westside 500 to 3,;%0 12.4 to 20 



On December 31, 1916. there were 949 producing wells in the Coalinga 
field. On March 1, 1917. the number had decreased to 942, but 10 
additional wells were completed during the month. 

4. SANTA BARBARA COUNTY. 

The petroleum fields of Santa Barbara County are generally referred 
to as the Santa I\Iaria field and the Summerland field. 

Santa Maria Field. 

The Santa ^laria field is located in the northern portion of Santa 
Barbara County, in the region of rolling hills between the Santa Ynez 
and San Rafael mountains. The territory nominally designated as 
the Santa ]\laria field includes three principal fields, known respectively 
as the Santa ^laria or Orcutt field, the Lompoc field and the Cat 
Canyon field. Within the last year very active development work 
has progressed in the westerly part of the Orcutt field, known as 
the Casmalia field. The Orcutt field is the most important of the 
.subdivisions of the Santa Maria field, and has a proved acreage of 
approximately 4,000 acres. The Cat Canyon field is an extension to the 
east of the Santa Maria field and has a proved acreage of approximately 
1.600 acres. The Lompoc field is located about five miles north of the 
town of Lompoc and has a proved acreage of approximately 1,600 acres. 
The Casmalia field is an extension westerly of the Orcutt field and is at 
present in process of being developed. 



CALIFORNIA PETROLEUM FIELDS. 33 

The first sueeessfnl well iu the Santa Maria field was completed in the 
Orcutt field in August, 1901. The production in this field in 1902 was 
86,888 barrels. The first well in the Cat Canyon field was completed in 
1908. The production of these two fields was 8,159,136 barrels in 1907 
and 8,430,230 barrels in 1908. Commercial production in the Lompoc 
field commenced in 1906, during which year the output was 46,400 
barrels. 

The production of the three fields comprising the general Santa 
Maria field increased from 86,888 barrels in 1902 to a maximum of 
8,699,350 barrels in 1908. Subsequent to 1908, the production has 
gradually decreased, being 4,422,410 barrels in 1916. 

The total production of these three fields from 1902 to December 31, 
1916, was 75,115,391 barrels, of which amount approximately 5,700,000 
barrels were produced in the Lompoc field. 

The wells in the Orcutt field have a depth of 2,000 to 4,000 feet, the 
average depth being approximately 3,000 feet ; in the Cat Canyon field, 
2,400 to 3,200 feet, with an average depth of 3,000 feet; and in the 
Lompoc field, from 2,500 to 4,400 feet, with an average depth of 2,700 
feet. 

The oil in the Orcutt field ranges in gravity from 20 to 35 degrees 
Baume and is used principality for refining. The oil in the Cat Canyon 
field is heavy and viscous, ranging from 11 to 19 degrees Baume, and 
is mainly used for fuel, road dressing and asphalt. The oil in the 
Lompoc field ranges in gravity from 16 to 37 degrees Baume and is 
valuable for refining. The oil in the Casmalia field is of 11 degrees 
Baume and heavier and accordingly is difficult to handle except 
when hot. 

The number of producing wells in the three fields combined on 
December 31, 1916, was 249, of which number 222 were in the Orcutt 
and Cat Canyon fields and 27 in the Lompoc field. On March 1, 1917, 
the number of producing wells in the Orcutt and Cat Canyon fields had 
increased to 227 (including the Casmalia field), while the number in the 
Lompoc field remained 27. 

Of the 44 wells drilling and the 17 rigs completed in the Santa Maria 
field in March, 1917, almost all are located in the Casmalia field. The. 
activity in this relatively small field was exceeded during this month 
only by the drilling in the extensive Midway and Whittier-FuUerton 
fields. 



3—31469 



34 REPORT OF COMMITTEE ON PETROLEUM. 

Summerland Field. 

The Summerland field is located on tlie Paeitie Ocean about six miles 
southeast from Santa Barbara and is uniciue in that its petroleum is 
secured principally from wells drilled into the sands lying beneath the 
Pacific Ocean. 

The field is very small, the proved acreage being only 230, or about 
one-third of one scpiare mile. 

The first well was completed in 1891 and commercial production 
started in 1894 with 1,500 barrels. The maximum production in this 
field was 208,370 barrels in 1899, since which year the production ha.s 
rapidly diminished. In 1916, 56,775 barrels were produced in this field. 
The present average daily production of 1.4 barrels per well in this 
field is by far the smallest production in any proved field in the state. 

The total production of the Summerland field from 1894 to December 
31, 1916, was 2,123,764 barrels. 

The wells in this field range in depth from 80 to 600 feet. 

The gravity of the oil varies from 9 to 18 degrees Baume, the average 
being abovit 14 degrees Baume. The oil is very viscous and is prin- 
cipally used for road dressing and fuel oil. 

The number of producing w'ells in this field on December 31, 1916, 
was 112. The same number were still operating on March 1, 1917. 

5. VENTURA COUNTY. 

The Ventura field consists of small, separate fields on either side of 
the Santa Clara Valley, extending from the Newhall field in Los 
Angeles County, hereinbefore referred to, to the Ojai Valley in Ventura 
County, about 50 miles farther Avest, with a pi'oved acreage of approxi- 
mately 4,500 acres. 

Ventura County is the oldest oil producing district in California. As 
early as 1866, 3,078 barrels of oil were produced and shipped during a 
period of ten months. The Santa Clara Valley produced practically 
all the petroleum in California up to 1880, when the Puente Hills field 
was discovered. By 1894 the annual production increased to 290,913 
barrels, produced by 45 wells. The production gradually increased to 
542,902 barrels in ]903, after which year there was a marked decrease 
in production. Beginning with 1912 a steady increase in production 
again took place. The production in 1912 was 662,300 barrels ; in 1913, 
899,007 barrels, and in 1916 approximately 1,000,000 barrels. 

The total combined production of Ventura County and the Newhall 
field (in Los Angeles County) from the beginning of production, ante- 
dating 1876, to December 31, 1916, Avas 18,738,338 barrels. 

The wells in Ventura County vary in depth from 200 to 3,700 feet, a 
large number having a depth of less than 1,000 feet. 



CALIFORNIA PETROLEUM FIELDS. 35 

The gravity ranges from 12 or 13 degrees Baume to 54 degrees Baume. 
The bulk of the petroleum produced in Ventura County is of refining 
grade. 

On December 31, 1916, there were 366 producing wells in the county. 
On March 1, 1917, the same number of wells were producing, but 31 
additional wells were being drilled, this being the largest number of 
wells being drilled in any field except Midway, Whittier-Fullerton, 
Coalinga and Santa Maria (principally Casmalia). 

Table 3 shows in summary form the salient facts with reference to the 
California petroleum fields as hereinbefore set forth. 



36 



REPORT OF COMMITTEE ON PETROLEHJM. 



TABLE 

Location, Development and Production of the 





Location of field 


Area 


Date of 
development 


rield 


Square 
miles 


Proved 
acreage 


ln"i='l Ic'Z 


Midway 


Western part of Kern County 
along the northeastern 
base of Temblor Range, be- 
tween McKittrick and Sun- 
set Fields 


73 


47,000 


1900 


1909 






Sunset 


Continuation, to the south- 
east, of the Midway Field. 


15 


9,500 


1891 


1900 






Kern River 


In Kern County about 4J 
miles northeast of Bakers- 
field. 


12 


7,900 


1899 


1900 


McKittrick 


In Kern County about 5 miles 
northwest of Midway Field. 


4 


1,650 


1866 


1898 


Lost Hills 

Belridge 


In Kern County, between 
Coalinga and McKittrick 
Fields. 

In Kern County about U 
miles northwest of McKit- 
trick Field. 




4,200 


1909 
1911 


1910 
1911 






Coalinga 


In western Fresno County 
along the northeastern base 
of the Mount Diablo Range. 


35 


17.500 


1890 


1896 






Whittier-Fuller- 
ton. 


In eastern part of Los An- 
geles and northwestern part 
of Orange counties. 


15 5,000 


1882 


1897 


Los Angeles 

Salt Lake 


In the low hills running 
through the northern part 
of the city of Los Angeles. 

About ih miles west of the 
business district of the city 
of Los Angeles. 


2 
2 


1,400 
1,200 


1892 
1901 


1894 
1904 


Newhall 


In Los Angeles County, some 
40 miles northwest of center 
of the city of Los Angeles. 

Small and entirely separate 
fields in the southeastern 
half of Ventura County. 




*540 
*4,500 


1875 
1866 


1880 


Ventura -- 


1870 






Santa Maria 

and 
Cat Canyon 

Lompoc 


In northern Santa Barbara 
County between Santa Ynez 
and San Rafael Mountains. 

About 5 miles north of 
Lompoc. 


2§ 


4,000 
1,600 

1.600 


1901 
1908 

1904 


1902 
1908 

1906 






Summerland 


On the Santa Barbara Chan- 
nel about 6 miles southeast 
of Snnta Barbara. 


i 


.230 


1891 


1894 



•Estimated. 



CALIFORNIA PETROLEUM FIELDS. 



37 



Principal Petroleum Fields of California. 








Production in barrels 


Depth of wells, 
feet 


Gravity of oil 


Produc- 
ing wells, 


First year 
of active 

developin?nt 


Tear of 

maximum 

development 


Year of 1916 


Total to 
Jan. 1. 1917 


gas. 

Dec. 31. 

1916 


2,234,455 


37,479,228 
(1914) 


32,156,818 


197,580,255 


500 to 4.000 


13 to 30° B. 


*1,255 


12,500 


12,546,615 
(1914) 


6,768,658 


57,681,754 


400 to 3,000 


11 to 26° B. *455 

! 


826,775 


17,226,240 
(1904) 


8,402,525 


190,149,600 


400 to 1,200; 
average 900 


10.4 to 17° B.; 1,908 
average 14° 


10,000 


5,807,360 
(1909) 


3,230,644 


48,862,217 


400 to 1,800; 
average 1,200 


12.5 to 21° B.; 
average 15° 


293 


4,900 


5,274,553 
(1913) 


4,852,431 


22,130,726 


500 to 2,000 
600 to 4,700 


15 to 38° B.; 
average 28° 


350 


14,119 


19,546,132 
(1912) 


14,381,493 


180,934,188 


30O to 4,700 


12.4 to 35.5° B. 


949 


12,000 


14,679,672 
(1916) 


14,679,672 


97,428,665 


70O to 5,000 


14 to 35° B. 


637 


2.57,109 

*.5(10,000 


751,945 

(1895) 

4,535,800 
(1908) 


1,721,453 


51,400,532 


50(J to 1,200 

800 to 3,000; 
average 1,725 


12 to 19° B. 
10 to 25° B. 


400 
273 


40,500 
3,078 


160,428 
(1910) 

*1,000.000 
(1916) 


1,122,033 


18,738,3.38 


700 to 6,000; 
average 1,000 

200 to 3,700 


11 to 38.7° B. 

12 to 40° B.; 
*5/6 above 18° 


80 
366 


1 

[. 86,888 

46,400 


8,430,230 
(1908) 

1,013,880 
(1912) 


*3,900,000 
*500,000 


*69,400,000 
*5,700,000 


2,000 to 4,000- 
a vera ge 3,000. 
2,400 to 3,20(^ 
average 3,000. 
2,500 to 4,400— 
average 2,700. 


20 to 35° B. 
11 to 19° B. 
16 to 37° B. 


222 
27 




4,422,410 75.115,391 
(Total) (Total) 




1,500 


208,370 1 56,775 2,123,764 
(1899) 


80to600 9 to 18° B.; 
I average 14° 


112 



i5S KKI'OKT OK C"OMMITTKK ON I'KTUOI -Kl' M . 

Tiihlc 4 shows (lie field tlcNclopiiu'iit ;iiitl i)i-()(luct ion of Cali t'oriiia 
pi'li-ol(Miiii licids as rcpoiicHl l»y Staiitlard Oil Coiunaiiy of California 
as of Doeenibcr .'U, IJHO. Tlic pi-oxcd aci-eaiii' shown includes tlie terri- 
tory between the main fields and (lie outlying wells, generally considered 
"provetl." 

II. \V il lidnncdls, l»( slortil ions diid li( s( rral ions. 

1. Withdrawals and Restorations. 

An understanding of the petroleum situation in California requires a 
reference to the withdrawals by the federal government of public lands 
in California from entry and to tiie restoration of portions thereof from 
time to t ime. 

While a tnunbcM- of withdrawals and restorations were made prior to 
September 27, 1 !)()!), the principal withdrawals of C-alifornia petroleum 
lands were made on and sul)se(|uent to September 27, 1909. 

On February 24. 1908, Mr. Ceorge Otis Smith, director of tiie TTuited 
State (ieological Survey, wrote to tiie Secretary of the Interior a letter, 
which I'cads in part as follows: 

"It will be easy, if desired, to multiply the authoritative state- 
ments already in print concerning the supei'iority of litpiid fuel 
for the Navy. For that reason 1 have to recommend that the tiling 
o\' claims to oil lands in the state of California be suspended in 
order that the government may continue ow^nership of valuable 
supplies of licjuid fuel in this region wher(> all fuel is expensive. 

"It is evident from the many reports on tlu' superiority of litpiid 
fuel that tlie (pu^stion of its a(l(»i>lion is simply a (piesti(m as to the 
price at which suitable petroleum products can be purchased. 

"The present i-ate at which the oil lands in California are being 
patented by i)rivate i)arties will make it impossible for the peoi)le 
of the United States to continue ownership of oil lands there more 
than a few months. After that. \\\v government will be obliged to 
repurchase the \-ery oil that it has practically given away." 

Mr. Smith also refers in his letter to the inade(|uai*y of the coal sui)ply 
on the Pacific coast. 

On November 11. 190S. Mr. David T. Day. expert in charge of petro- 
leum, and Mr. Ralph Arnold, expert in charge of California ]>etroleum, 
wrote to the Director of the Cnited States (Jeological Survey "that the 
withdrawal of public lands known to contain petroleum is an immediate 
uiH-essitN' for tlii' adeipiate supply of this matei'ial during the remainder 
of the century or even foi- the next lifty ycai's." The letter continues 
as follows : 

"This condition is due not to tlu' popularity of petroleum, but to 
the character of the production, which consists in realizing on the 
peti-oleum contained in one lease before it can be 'pumped throimh 
the wells of an adjoining lease. This situation renders imperative 



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40 REPORT OP COMMITTEE ON I'ETROLEUM. 

favorable action on the recommendation made last year in the letter 
of which Ave enclose a copy." 

[Letter of February 24, 1908. from the Director to the Secretary of the Interior.] 

On September 17, 1909, Mr. George Otis Smith, Director of the United 
States Geological Survey, wrote to the Secretary of the Interior as 
follows : 

September 17, 1909. 
The Honorable, The Secretary of the Interior. 

Sir: I have the honor to transmit liorewith a copy of a letter 
addressed to yonr predecessor in February, 1908. The arguments 
presented in support of the recommendation made at that time are 
still valid, and they have been amplified in the Survey's Conserva- 
tion Report on the Petroleum Resources of the ITnited States, a copy 
of which I submit herewith. In this report it is shown that the 
present production of petroleum exceeds the legitimate demands of 
the trade and that inasmuch as the disposal of the public petroleum 
lands at nominal prices simply encourages overproduction the 
logical method of checking this unnecessary waste would be to secure 
the enactment of legislation that would provide for the sane 
development of this important resource. In view of- the well-known 
facts of the mode of occurrence of oil and the all-too-common 
practice of drilling wells close to boundary lines of private holdings 
that are being developed for oil, conservation of the petroleum 
supply demands a law that will provide for disposal of the oil 
remaining in the public domain in terms of barrels of oil rather 
than of acres of land. 

I have the honor to also call your attention to the estimate in the 
petroleum report that at least one-half pint of lubricating oil is 
used for every ton of coal converted into power, and that this 
quantity of lubricating oil represents over a half-gallon of crude 
loetroleum. Taking this into account as well as the increasing use 
of fuel oil by the American Navy, there would appear to be an 
immediate necessity for assuring the conservation of a proper 
supply of petroleum for the government's own use. I would there- 
fore renew my recommendation that pending the enactment of 
adequate legislation on this subject, the filing of claims to oil land 
in the state of California be suspended. 

In this connection it is important to note that acting on my report 
of June 4, 1909, classifying certain oil lands in California, the 
Commissioner of the General Land Office issued instructions to 
registers and receivers to withhold those oil lands from agricultural 
entrj^ pending consideration of the question of legislation. The 
area of oil land affected by this action is about 427,000 acres, to at 
least 40 per cent of Avhich the government retains title. In several 
townships, notablv T. 32 S., R. 22 E. ; T. 32 S., R. 23 E. ; T. 32 S., 
R. 21 E. ; T. 30 S., R. 21 E. ; T. 31 S., R. 23 E. ; T. 31 S., R. 22 E. ; 
T. 31 S., R. 24 E. of the IMouut Diablo Meridian ; and in T. 11 N., 
R. 24 W., and T. 12 X., R. 25 \\., of tlie San Bernardino :\reridian, 
there are compact areas of unappropriated oil land, each including 
from 6 to 16 contiguous sections. 

Very respectfully, 

Geo. Otis Smith, 
Director. 



CALIFORNIA PETROLEUM FIELDS. 41 

On September 17, 1909, Secretary Ballinger wrote to President Taft 
recommending that in aid of such legislative action as would assure the 
conservation of an adequate supply of petroleum for the government's 
own needs, the oil lands referred to in the letter should be withdrawn 
from all forms of filing, entry and disposal, including mineral entry. 
This letter reads as follows : 

September 17, 1909. 
The President, ^Vliite House. 

Sir: I have the honor to bring to your attention the subject of 
the conservation of the petroleum resources of the public domain, 
with special reference to the present and future requirements of 
the American Navy. 

The six largest battleships in commission or under construction 
are equipped for the use of either oil or coal and the fourteen latest 
destroyers use oil exclusively. 

The Geological Survey reports that the present rate of production 
of petroleum can not be maintained beyond a very few years, after 
which a marked decrease will result in an insufficient supply and 
increased prices. At present the production exceeds the legitimate 
demands of the trade and inasmuch as the disposal of the public 
petroleum lands at nominal pricas simply encourages overproduc- 
tion, the logical method of checking this unnecessary waste would 
be to secure the enactment of legislation that would provide for 
the sane development of this important resource. In view of the 
well-known facts of the mode of occurrence of oil and the all-too- 
common practice of drilling wells close to the boundary lines of 
private holdings that are being developed for oil, conservation of 
the petroleum supply demands a law that will provide for the dis- 
posal of the oil remaining in the public domain in terms of barrels 
of oil rather than of acres of land. 

The Navy has a further interest in the conservation of the 
petroleum supply l\v reason of the absolutely necessary use of 
petroleum products for lubrication. A very conservative estimate 
is that at least one-half pint of lubricating oil is used for every ton 
of coal converted into power and that this quantity of lubricating 
oil represents over a half-gallon of crude petroleum. 

The recommendation was made by the Director of the Geological 
Survey in February, 1908, to my predecessor that the filing of 
claims to oil land in the state of California be suspended in order 
that the government may continue the ownership of a sufficient 
supply of petroleum on the Pacific Coast where other fuel is 
expensive. No action to this end has been taken. 

Acting upon the Survey's report of June 4, 1909, classifying 
oil lands in California, the Commissioner of the General Land 
Office on June 22, 1909, issued instructions to the registers and 
receivers to withhold these oil lands from agricultural entry, 
pending consideration of the question of legislation. The area 
classified as oil land is 430,000 acres, to at least 40 per cent of which 
the government still retains title. In several townships in this 
tract there are compact areas of unappropriated oil land, each 
including from 6 to 16 contiguous square miles. 



42 RKl'ORT OF CX)MIVHTTEE ON PETROLEUM. 

As a result of i)revious woi'k l)y the (Jeological Survey, similar 
action was taken in June, 1908, on 150,240 aeres in California, 
classified as oil land, the title to a considerable portion of which 
is believed to remain in the government. Furthermore there is at 
present withdrawn in California pending examination and classi- 
fication by the Geological Survey, which Avork is now in progress, 
approximately 1.650,000 acres, of which 1,250,000 acres are with- 
drawn from all entry. 

The time appears o])portune for legislative action that will assure 
the conservation of an adeciuate supply of petroleum for the govern- 
ment's OAvn needs. This legislation should give authority to fix 
the terms of disposition of public oil lands so as to provide for the 
future demands of the Navy and should also authorize the perma- 
nent reservation of such areas as the Executive, after full investi- 
gation, may find necessary for this federal purpose. It is believed 
that such legislation would not interfere with the profitable develop- 
ment and utilization of the California oil pools. 

In aid of such legislation and indeed as essential to the accom- 
plishment of its purpose, all the lands hereinbefore mentioned 
should be temporarily withdrawn from all forms of filing, entry 
and disposal, including mineral entry. 

I have the honor to be, 

Very respectfully, 

R. A. Ballinger, 
Secretary. 

On September 27, 1909, by Temporary Petroleum Withdrawal No. 5, 
3,041,000 aeres of lands which were supposed to contain petroleum 
were withdrawn from all forms of location, settlement, selection, filing, 
entry or disposal under the mineral or nonmineral public land laws. 
This acreage includes a large amount of land which had already been 
I/atented, or to which other valid claims had attached. The order of 
withdi'awal reads in ])art as follows: 

"In aid of proposed legislation afiTecting the use and disposition 
of the petroleum deposits on the public domain, all public lauds 
in the accompanying lists are hereby temporarily withdrawn from 
all forms of location, settlement, selection, filing, entry, or disposal 
under the mineral or nonmineral public land laws. All locations 
or claims existing and valid on this date may proceed to entry in 
the usual manner after field investigation and examination." 

Of the 3,041,000 acres of laiul included in this withdrawal order, 
2,871,000 acres were located in California and 170,000 acres in 
AVyoming. 

On June 25, 1910, congress specifically authorized the President at 
any time, in his discretion, to temporarily withdraw from settlement, 
location, sale or entry any of the public lands of the United Statas, 
including the District of Alaska, and to reserve the .same for water 
l)ower sites, irHgation. classification of lands, or other i)ublic purposes 
to be specified in the orders of withdrawal, and provided that such 



CALIFORNIA PETROLEUM FIELDS. 43 

withdrawals or reservation should remain in force until revoked by the 
President or by an act of congress (36 Stat. 847). 

On July 2, 1910, President Taft authorized orders of withdrawal 
affecting California and other states. The order affecting California 
involved approximately 2,482,750 acres. This order ratified and eon- 
firmed, with reference to the lands therein described, a number of former 
temporary withdrawal orders, as follows : 

September 27, 190!), Temporary Petroleum Withdrawal No. 5 
October 30, 1909, Temporary Petroleum Witlidrawal No. 8 
November 16, 1909, Temporary Petroleum Withdrawal No. 9 
January 38, 1910, Temporary Petroleum Withdrawal No. 11 
Fel)ruary 2, 1910, Temporary Petroleum Withdrawal No. 12 

Subsecjuent to July 2, 1910, a number of withdrawal orders and 
restoration orders affecting California were made. These orders are all 
set forth in Bulletin No. 623, United States Geological Survey (1916). 
The status of California petroleum lands included in withdrawal 
orders is reported in said Bulletin No. 623 to have been, in April, 1915, 
as follows : 

Patented — Acres 

Under railroad grants 308,075 

Under other noumineral laws 708,441 

Under minei'al laws 38,668 

Total patented 1,055,184 

Unpatented — 

Covered by railroad selection 160 

Covered by other noniuineral entry or selection 60,911 

Covered by mineral application for patent 40,790 

Vacant or covered by mineral location 350,833 

Total unpatented 452,694 

Total withdrawn 1,507,878 

On June 30, 1916, Commissioner Tallman of the General Land Office 
reported to the Special Joint Conference of the Committees on Public 
Lands of the United States Congress that the outstanding withdrawals 
of California petroleum lands were as follows : 

A.crGS 

Patented 899,103.78 

Mineral entries 35,539.81 

Agricultural entries 84.862.18 

Vacant or embraced in agricultural entries under the Surface Act 341,608.88 

Total 1,361,114.65 

It will be observed from the foregoing figures that the lands included 
in the withdrawn area include a large acreage of lands already patented 
and of other lands on which entry has been made. 

The withdrawn area includes all or a part of the oil fields of Coalinga, 
Lost Hills, Belridge, ]\IcKittrick, Midway, Sunset and Kern Eiver, all 
located in the San Joacpiin V;dley, ;ind a small acreage at Whittier and 
Olinda, in the Whittier-Fullei-fon field in Los Angeles and Orange 
counties. The withdrawn area also includes lands not located within 



44 REPORT OF COMMITTEE ON PETROLEUM. 

any liehl now reji'ai'dcd ns i)i'()ved territory, including particularly a 
large area of land in the eastern ])ortion of Monterey and San Luis 
Obispo counties. A niaj) showing accurately the withdrawn area as of 
November 1. 1915. accompanies Hulletin No. 623, United States Geo- 
logical Survey. 

2. Naval Reserves. 
A part of the withdrawn area in California has been set aside as 
Naval Reserves Nos. 1 and 2 for the use of the Navy, in so far as the 
lands in these reserves are not subject to valid claim by private parties. 

Naval Reserve No. 1. 

Naval Reserve No. 1 includes 38,072.71 acres in the Elk Hills, Midway 
field. Keiii Comity, California. 

This reserve was created on Septend)er 2, 1!)12, by oi-der of President 
Taft, reading as follows: 

OrDEK of WlTJIDKAWAL. 

Naval Petroleum Ixeserve No. 1. 
it is hereby ordered that all lands included in the following list 
and heretofore forming a part of Petroleum Reserve No. 2, Cali- 
fornia No. 1, withdrawn on July 2, 1910, from settlement, location, 
sale, or entry and reserved for classification and in aid of legislation 
under the authority of the act of congress entitled "An act to 
authorize the President of the United States to make withdrawals 
of public lands in certain cases (36 Stat., 847)," shall hereafter, 
subject to valid existing rights, constitute Naval Petroleum Reserve 
No. 1 and shall be held for the exclusive use or benefit of the 
Ignited States Navy until this order is revoked by the President or 
by act of congress. To this end and for this public purpose, the 
order of July 2, 1910, is modified and the withdrawal of that date 
is continued and extended in so far as it affects these lands. 

Mt. Diablo Mcndian. 

T. 30 S., R. 22 E., Sec. 24, all. 

T. 30 S., R. 23 E., Sec. 10, all; Sees. 12 to 30, inclusive; Sees. 32 
to 36, inclusive. 

T. 31 S., R. 23 E., Sees. 1 to 4. inclusive; Sees. 10 to 14, inclusive. 
T. 30 S., R. 24 E., Sees. 17 to 20, inclusive; Sees. 28 to 34, 
inclusive. 

T. 31 S., R. 24 E., Sees. 1 to 12, inclusive; Sec. 18, all. 

Wm. H. Taft, 

President. 

The status of the laiul in Naval Reserve No. 1, on December 20, 1916, 
was as follows: 

Acres 

ratontod to Southern Pacific Railroad Company (16i sections) 10,770.70 

Patented to other partie.s (2 school sections) 1,332.39 

Pending mineral applications (10) 4,532.95 

Vacant and nnentered on General Land Office records 21,436.67 

Total area (59 sections) 38,072.71 




Z/WZ" 



1^^ 






f^ 



_zx. 




^^ Of/?er lanc/j in Litigaf/on 

■ ": i^/O Drox/mate Ov/Z/'ne of fho<^uc/nQ Terr/Yor u 

Lands in Litigation 



N<qv<qL Petroleum Reserves Nos. I & 2 






L m il i '* e f 



\ 



JV- 



CALIFORNIA PETROLEUM FIELDS. 45 

The federal government has brought suit to cancel the patents here- 
tofore issued to the Southern Pacific Railroad Company covering the 
entire area of 10,770.70 acres claimed by the railroad company in this 
reserve. Of this area, 6,109.17 acres are included in Case No. 221, 
known as the Elk Hills suit, which suit was won by the government in 
the District Court and is now pending on appeal before the United 
States Circuit Court of Appeals. 

The status of the 4,532.95 acres affected by pending mineral applica- 
tions was, on December 20, 1916, as follows : 

Acres 

Adverse proceedings directed 2,772.31 

Private contests or adverse suits 1,600.64 

Pending investigation 160.00 

Total 4,532.95 

Two of the so-called withdrawal suits hereinafter referred to affect 
land in this reserve as follows : 

No. of suit Land affected 

Case A-31 S. E. i Sec. 26, T. 30 S., R. 23 E., M. D. M. 

Case A-68 S. W. i Sec. 24, T. 30 S., R. 23 E., M. D. M. 

The claimant in these two suits is Associated Oil Company. 

Approximately 27 wells have heretofore been drilled in Naval Reserve 
No. 1. Of these wells, three entered the oil sand, but they have been 
shut down and are not producing. At the present time there is no 
producing well in Naval Reserve No. 1. 

In letter dated April 24, 1916, to Senator Henry L. Myers, Hon. 
Franklin K. Lane, Secretary of the Interior, refers to the possible 
petroleum content of Naval Reserve No. 1 as follows: 

"The Elk Hills in the Westside fields of California are struc- 
turall.y favorable for the accumulation of oil and gas, and they 
were considered as prospective oil lands by the Survey when it 
first examined them. Since that time a few wells have been drilled 
here and have proved that oil is present in considerable quantity. 
The amount of oil available has been estimated roughly by com- 
paring the area with other productive areas that have similar 
geological features, and is placed at approximately 100,000,000 
barrels." 

Mr. W. A. Williams, testifying before the Special Joint Conference 
of the Committees on Public Lands, United States Congress, on Decem- 
ber 19, 1916, stated that in his judgment the oil content of Naval 
Reserve No. 1 is approximately 128,800,000 barrels. 

Naval Reserve No. 2. 

Naval Reserve No. 2 includes 30,180.67 acres in the Buena Vista 
Hills, in the Midway field, Kern County, California. 



46 REPORT OF COMMITTEE ON PETROLEUM. 

This reserve was created on December 13. 1912. by order of President 
Taft. reading as follows : 

Ordp:r of "Withdrawat.. 
Xaval Petroleum Reserve No. "2. 
It is hereby ordered that all lauds included in the foHowing- list 
and heretofore forming a part of Petroleum Reserve No. 2, Cali- 
fornia No. 1, witiulrawn on July 2, IDIO, from settlement, location, 
sale, or entry, and reserved for dassitication and in aid of legisla- 
tion under the authority of the act of congress entitled '*An act to 
authorize the President of the United States to make withdrawals 
of public lauds in cert^\iu cases (36 Stat., 847)," shall hereafter, 
subject to valid existing rights, constitute Xaval Petroleum Reserve 
Xo. 2 and shall be held for the exc-lusive use or benefit of the United 
States Xavy until this order is revoked by the President or by act 
of congress. To this end and for this public purpose, the order of 
July 2. 1910, is modified and tbe withdrawal of that date is con- 
tinued and extended in so far as it affects these lands. 

Mt. Diablo Meridian. 

T. 31 S., R. 23 E.. Seis. 7 to 9. inclusive; Sees. 15 to IS, inclusive; 
Sees. 20 to 23. inclusive; Sees. 25 to 29. inclusive; Sei-s. 33 to 36. 
inclusive. 

T. 31 S.. R. 24 E., Sees. 30 to 32, inclusive. 

T. 32 S., R. 23 E.. Sees. 1 to 3. im-lusive; Sees. 11 to 13. inclusive. 

T. 32 S., R. 24 E., Sees. 2 to 18, inclusive. 

T. 32 S.. R. 25 E.. Sec. IS, all. 

Wm. H. Taft. 

President. 

The status of the laud in Xaval Reserve Xo. 2. on December 20. 1916, 
^vas as follows ; 

Acres 

Patented to Southern Pacific Railroad Company (24 sections) 15.394.2G 

Patented to other parties (oj sections) 1 3,t>96.6S 

Pending mineral applications (33) 7.3S3.60 

Vacant and unentered on General Laud Office records 3.7CH.>.13 

Total area (47 sections) 30,1S0.G7 

All the land in Xaval Reserve No. 2 heretofore patented to the 
Southern Pacific Railroad Company is included in suits by the federal 
government asking for caucellation of patents. 

Thirteen additional sections, having an additional acreage of approxi- 
mately S.320 acres, are included in the so-called witlidrawal suits filed by 
the federal government and hereinafter referred to. 

Sixty-three and two-tenths per cent of the area of Naval Reserve 
X'o. 2 has heretofore been patented. The acreage is held as follows : 

Acres 

Southern Pacific Railroad Company (24 sections) 15.394.2G 

Standard Oil Company (21 sections) 1,440.00 

Honolulu Consolidated Oil Company (1^ sections) SOO.OO 

Associated Oil Company (J section) SO.OO 

Other parties 1,37G.G8 

Total patented 19,090.94 



C.MiTFORNIA PETROI.EITM FIELDS. 47 

The slntus of tlic 7.;5(S:^()() acres aff'eetedby peiidiiia;- iiiiiieral applica- 
tions was, on December- 20, IDKi, as follows: 

Acres 

Adverse ])rocee(liii}>s directed (20 cases) 4,986.15 

(Mear listed hut not patented, Honolulu Consolidated Oil Co.,. 

witlidrnwal suits 2.077. 4r> 

Adverse suit 820.00 

Total 7,383.60 

Pi-actically the entire ai'ea listed as vacant and unentered on the 
records of llie (ieneral Land Oflice, heinu' ;?,7()(i.l;5 acres, is covered with 
claims and a lar>ie portion thereof with wells. 

On December 20. li)l<), Connuissioiier Tallman re|)orted 1o the Special 
•Joint Conference (d* the Committees on Public Lands of the United 
States (-ongress that the wells, acreajie and pr()bal)le petroleiun content 
of Naval Reserve No. 2 were as follows: 



Clainiiiiit 


I'lodiic- 
ing 
wells 


Dry 

wells 


Total 
acres 


Probable 

oil 

lands 


Kstimated 

oil coiitpnt. 

liarrels 


Per- 
centage 


Kern Trading and Oil Co. 
(S()utli(>rn Pacific) 


57 


10 

7 

3 

16 

17 


15,360 
3,680 
2,080 
3,680 
5,280 


9,940 
2.550 
1,800 
220 
4,500 


198,800.000 

51,0<l(l.00O 

36,000,000 

4,400,000 

90,000,000 


52.4 


rttlicr patentees _ 


118 


13.3 


Clear listed (Honolulu) 

Unentered __ . -. 


17 

2- 

121 


9.4 
1.4 


(Maimed and unpatented 


23.5 


Totals .. 


315 


53 


30,080 


19,010 


380,200,000 


100 











Coniniissioner Tallman estimated that of the total a.ssumed petrohnim 
content of 380.200.000 barrels, 80,000.000 barrels have already been 
extracted. 

The most reliable data which this committee has been able to secure 
from actual reports from the field show that on L^ecember 31, 1916, 234 
Avells inside Naval Reserve No. 2 were producing oil, as contrasted 
with the 315 wells reported by (Commissioner Tallman. The average 
daily ])roduction of these wells was 41.400 liarrels. 

The relative importance of production in Naval Reserve No. 2 as 
contrasted with production in the IMidway-Sunset field and with the 
total jiroducticn in all the oil fields of California is shown by the fol- 
lowing comparison, as of December 31, 1916: 





Daily 
Proved produc- 
acreage tion in 

barrels 


Xumber 
of pro- 
ducing 
wells 


Daily 
produc- 
tion 
per well 


Dally 
produc- 
tion per 
acre 


Number 
of acres 
per well 


Inside Naval Reserve No. 2 

Midway-Sunset Field, outside 
Naval Reserve No. 2 

All oil fields- 


18,240 

38,298 
108,183 


41,400 234 

60,817 1,476 
255,983 7.3.93 


176.9 

41.2 
34.9 


2.27 78 

1.59 : 25.9 
2 37 ' 14.S 













48 REPORT OF COMMITTEE ON PETROLEUM. 

In the foregoing coniputatidii. tlic in-oved acreage ineludes the terri- 
tory between the main fichls and outlying wells, which is generally con- 
sidered as "proved." 

Referring to Naval Reserve No. 2, ^Nfr. E. B. Latham, expert witness 
for the government in the withdrawal suits, reports in a letter dated 
February 15. 191G. to the Secretary of the Navy, in part as follows: 

1. This reservation is situated in a proved field where the under- 
ground conditions are thoroughly understood. 

2. The field may be quickly drilled by rotary tools. Six weeks after 
commencing drilling the well can be made a producer. 

3. Large production is at once available. This is gusher territory. 

4. Transportation facilities are ample. Five pipe lines reach three 
different California coast ports. There are also ''ample railroad 
facilities." 

A map attached to this report as Plate VII shows all lands in litiga- 
tion and also Naval Reserves Nos. 1 and 2 and the lands therein. 

III. Legislation. 

A reference to the most important federal and state legislation 
affecting California petroleum lands may be helpful. 

1. FEDERAL LEGISLATION. 

The act of February 11, 1897 (29 Stat. 526) provides that petroleum 
deposits on the unwithdrawn public domain are acquired under the 
Placer Law. The act reads as follows : 

"That any person authorized to enter lands under the mining 
laws of the United States may enter and obtain patent to lands 
containing petroleum or other mineral oils, and chiefly valuable 
therefor, under the provisions of the laws relating to placer mineral 
claims; provideth that lands containing such petroleum or other 
mineral oils which have heretofore been filed upon, claimed, or 
improved as mineral, but not yet patented, may be held and pat- 
ented under the pro\dsions of this act the same as if such filing, 
claim or improvement were subsecpient to the date of the passage 
hereof." 

Subsequent to the withdrawal order of September 27, 1909, congress, 
by act of June 25, 1910 (36 Stat. 847), definitely granted to the Presi- 
dent the authority, for public purposes, to make temporary withdrawals 
of lands of the puy)lic domain. The act of June 25. 1910, commonly 
known as the "Pickett Act," as amended ])y the act of August 24, 1912 
(37 Slat. 497), provides as follows: 

"Section 1. That the President may, at any time in his dis- 
cretion, temporarily withdraw from settlement, location, sale, or 
entry any of the public lands of the United States including the 
District of Alaska and reserve the same for water-power sites, irri- 



CALIFORNIA PETROLEUM FIELDS. 49 

gation, classification of lands, or other public purposes to be speci- 
fied in the orders of withdrawals, and such withdrawals or reserva- 
tions shall remain in force until revoked by him or by an act of 
congress. 

"Sec. 2. T :at all lands withdrawn under the provisions of this 
act shall at all times be opsn to exploration, discovery, occupation, 
and purchase under the mining laws of the ITnited States, so far as 
the same apply to metalliferous minerals ; provided, that the rights 
of any person who, at the date of any order of withdrawal here- 
tofore or hsreafter made, is a bona fide occupant or claimant of 
oil or gas bearing lands and who, at such date, is in the diligent 
prosccuton of work leading to the discovery- of oil or gas, shall not 
be affected ot impaired by such order so long as such occupant or 
claimant shall continue in diligent prosecution of said work; pro- 
vided, further, that this act shall not be construed as a recognition, 
abridgement, zv enlargement of any asserted rights or claims 
inihated upon any oil or gas bearing lands after any withdrawal of 
such lands made prior to June twenty-fifth, nineteen hundred and 
ten; and provided, further, that there shall be excepted from the 
force and effect of any withdrawal made under the provisions of 
this act all lands which are, on the date of such withdrawal, 
embraced in any lawful homestead or desert-laud entry theretofore 
made, or upon which any valid settlement has been made and is at 
said date being maintained and perfected pursuant to law ; but the 
- terms of this proviso shall not continue to apply to any particular 
tract of land unless the entryman or settler shall continue to 
comply with the law under which the entry or settlement was made ; 
and provided, further, that hereafter no forest reserve shall be 
created, nor shall any additions be made to one heretofore created, 
within the limits of the states of California, Oregon, Washington, 
Idaho, Montana, Colorado, or Wyoming, except by act of congress. 

"Sec. 3. That the Secretary of the Interior shall report all such 
withdrawals to congress at the beginning of its next regular session 
after the date of the withdrawals." 

In response to the request of California oil producers that the Secre- 
tary of the Interior be given authority to permit the production of 
petroleum to continue on lands of the public domain pending the 
determination of the validitj" of claims of occupants thereto, congress 
enacted the act of August 25, 1914 (38 Stat. 708), known as the Relief 
Act, which act amends the act of March 2, 1911, by adding thereto a 
new section, a.s follows : 

"Sec. 2. That where applications for patents have lieen or may 
hereafter be offered for any oil or gas land included in an order of 
withdrawal upon which oil or gas has heretofore been discovered, 



4—31469 



50 REPORT OF COMMITTEE ON I'ETUOLEUM. 

or is being produced, or upon which drillins^' operations were in 
actual progress on October third, nineteen hundred and ten, and 
oil or gas is tliereafter discovered thereon, and where there has been 
no final deteruiination hy the Secretary of tlie Interior upon such 
applications for patent, said Secretary, in his discretion, may enter 
into agreements, under such conditions as he may prescribe with 
such applicants for ])atents in possession of such land or any por- 
tions thereof, relative to the disposition of the oil or ga^s produced 
therefrom or the proceeds thereof, pending final determination of 
the title thereto by the Secretary of the Interior, or such other 
disposition of the same as may be authorized by law. Any money 
which may accrue to the United States under the provisions of this 
act from lands within tlie Naval Petroleum Reserves shall he set 
aside for the needs of the Navy and deposited in the Treasury to the 
credit of a fund to be known as the Navy Petroleum Fund, which 
fund shall be applied to the needs of the Navy as congress may 
from time to time direct, by appropriation or otherwise." 

Under an arrangement between the Secretary of the Navy and the 
Secretary of the Interior, no agreements under this act have been made 
l)y the Secretary of the Interior covering any lands within Naval 
Reserves Nos. 1 and 2. 

There is now pending before the federal congress a bill known as 
H. R. 3232, introduced on April 16, 1917, by Mr. Ferris and commonly 
known as the "Leasing Bill." This bill undertakes to authorize 
exploration for and disposition of coal, phosphate, oil, gas, potassium 
and sodium. Section 12 of the bill reads as follows : 

' ' That all deposits of oil or gas and the unentered lands contain- 
ing the same and classified as oil or gas lands, or proven to contain 
such deposits, except, however, those embraced in any prospecting 
permit during the life of the same, those patented or for which 
application for patent by the permittee is pending under the pro- 
visions hereof, may be leased by the Secretary of the Interior 
through competitive bidding under general regulations in areas not 
exceeding six hundred and forty acres and in tracts which shall not 
exceed in length two and one-half times their width, such leases to 
be conditioned upon the payment l)y the le.-see of such royalty as 
may l)e fixed in the lease, which shall be not less than one-tenth 
in amount or value of the production, which royalty on demand of 
the Secretary of the Interior shall be paid in oil or gas, and the pay- 
ment in advance of a rental of not less than ^l per acre per annum 
thereafter during the continuance of the lease, the rental paid for 
any one year to be credited against the royalties as they accrue 



CALIFORNIA PETROLEUM FIELDS. 51 

for that year. Leases shall be for a period of twenty years, 
with the preferential riii'ht in the lessee to reneAV the same for 
successive periods of ten years upon such reasonal)le terms and 
conditions as may be prescribed by the Secretary of the Interior, 
unless otherwise provided by law at the time of the expiration 
of such periods; provided, further, that upon relinquishment or 
surrender to the United States, within six months from the date of 
this act, by any locator or his successors in interest of liis or their 
claim to any unpatented oil or gas lands included in an order of 
withdrawal, upon which oil or gas had been discovered, was being 
produced, or upon which drilling operations were in actual progress 
Januarj^ first, nineteen hundred and fourteen, and the claim to 
which land was initiated prior to July third, nineteen hundred and 
ten, the Secretary of the Interior may, within his discretion, lease, 
on such reasonable terms and conditions as he may prescribe, to 
such locator or his successors in interest the said lands so relin- 
quished, not exceeding, however, the maximum area of six hundred 
and forty acres to any one person, association, or corporation, said 
leases to be conditioned upon the payment by the lessee of a royalty 
of not less than one-eighth of the oil or gas extracted or produced 
from the leased premises or the proceeds thereof, each lease to be 
for a period of twenty years, with the preferential right in the 
lessee to renew the same for succeeding periods of ten years, upon 
such reasonable terms and c(mditions as may be iJrescribed by the 
Secretary of the Interior." 

2. CALIFORNIA LEGISLATION. 

By act of June 10, 1915 (Chapter 718, Stat. 1915, p. 1404), the state 
of California made provision for the appointment of a state oil and gas 
supervi'-:or, with authority to supervise the drilling, operation, main- 
tenance and abandonment of petroleum or gas wells in the state of 
California so as to prevent, as far as possible, damage to underground 
petroleum and gas deposits from the infiltration of water and other 
causes, and the loss of petroleum or natural gas. Under this statute, 
persons desiring to drill wells must file an information notice with the 
oil and gas supervisor. They must take adecpiate means to shut off 
water, under the direct supervision of the oil and gas supervisor or a 
deputy. Wells can not be abandoned unless precautionary measures 
approved by the oil and gas supervisor have been taken. 

The legislature of 1917 passed Senate Bill No. 769, amplifying and 
strengthening the jurisdiction of the oil and gas supervisor in the 
prevention of damage to petroleum and gas deposits from the infiltra- 
tion of water and other causes. 



52 REPORT OP COMMITTEE ON PETROLEUM. 

IV. Litigation. 

Actions filed by the federal government involving California petro- 
leum lands are generally grouped as follows: 

1. Southern Pacific suits. 

2. Withdrawal suits. 

1. Southern Pacific Suits. 

The federal government has filed seven suits involving the so-called 
Southern Pacific lands. The basis of these suits is the claim that the 
Southern Pacific Railroad Company secured its patents to these lands 
through fraud. 

One suit, known as Case No. 221, involving approximately 6,400 
acres, of which 6,109.17 acres are located in Naval Reserve No. 1, was 
decided in favor of the government on August 9, 1915. This ease is 
now pending on appeal before the United States Circuit Court of 
Appeals for the Ninth Circuit. 

The other six suits involve approximately 166,000 acres, of which 
amount approximately 156,000 acres are owned directly or indirectly 
by the Southern Pacific Company, the remaining acreage having been 
sold to third parties. These six suits have been consolidated for 
hearing and decision and the testimony has been concluded. 

These seven suits together involve all the oil lands owned by the 
Southern Pacific Company in the state of California with the exception 
of one section in the Kern River field and a small acreage in the 
McKittrick field. 

2. Withdrawal Suits. 

Up to July 1, 1917, the federal government had filed 71 so-called 
withdrawal suits, affecting a total acreage of approximately 13,180 
acres. Of this acreage, 10,980 acres are located in the Midway field, 
3,120 acres in the Lost Hills field and 1,080 in the Sunset field. 

Two quarter sections, containing 320 acres, are located in Naval 
Reserve No. 1 and 51 quarter sections, containing approximately 8,160 
acres, are located in Naval Reserve No. 2. 

These suits all atlfect lands included in the withdrawal order of 
September 27, 1909. Each of these suits is based on one or both of the 
following claims : 

1. That the claimants are not bona fide occupants and claimants of 
the lands in the diligent prosecution on September 27, 1909, of work 
leading to the discovery of oil or gas or that they did not, subsequent 
to September 27, 1909, continue in diligent prosecution of said work. 



CALIFORNIA PETROLEUM FIELDS. 53 

2. That the claimants hold under dummy entrymen. 

The defendants in these actions are in part producing companies, in 
part marketing or purchasing companies and in part locators and other 
possible claimants. 

Table 5 shows in each instance the number of the withdrawal suit, the 
name of the first defendant, the land affected, the producing company 
or companies, the purchasing company or companies, whether the land 
is located in one of the two naval reserves, and whether it is being 
operated by a receiver under court order. 



54 



REPORT OF COMMITTEE ON PETROLEUM. 



TABLE 

Withdratval 



Num- 
ber of 
suit 


Name of flret defendant 


Land 


47 


Midway Northern Oil Co.. — 


N.W. i Sec. 32, T. 12 N., R. 23 W.. 
S.B.M. 


A-2 


Consolidated Midway Oil Co 


Fractional See. :«), T. 12 N., R. 23 W., 
S.B.M. 


A-3 


Anu'rii'iui Oilliclds Co., Ltd 


S.K. i Sec. 32, T. 12 N., R. 23 W., 
S.B.M. 


A-12 


G. W. McCutehen. 


S.W. k Sec. 32, T. 12 N., R. 23 W., 
S.B.M. 


A-13 


David Kinsey . _- 


S.W. k Sec. 4, T. 11 N., R. 23 W., 




S.B.M. 


A-30 Midlaud Oilfields Co., Ltd 


N.P:. i Sec. 32, T. 12 N., R. 23 W., 
S.B.M. 


A-31 Associated Oil Co 


S.W. 1 See. 2a. T. 30 S., R. 23 E., 
M.D.M. 


A-34 ■ Brookshire Oil Co 


S.E. i Sec. 24, T. 31 S., R. 22 E., 
M.D.M. 


A-35 


Brookshire Oil Co. 


N.E. i Sec 24, T. 31 S.. R. 22 E., 




M.D.M. 


A-36 


Brookshire Oil Co. _ _ _ __ 


N.W. J Sec. 24, T. 31 S., R. 22 E.. 






JM.D.M. 


A-37 


Devil's Den Cons. Oil Co 


N.E. i Sec. 30,- T. 26 S., R. 21 E., 




M.D.M. 


A-38 


Thirty-two Oil Co 


N.E. i Sec. 32, T. 31 S., R. 23 E., 
M.D.M. 


A-39 


Chanslor-Canfleld Midway Oil Co... 


S.W. J See. 2.3. T. 31 S., R. 22 E., 
M.D.M. 


A-41 Kcc'ord Oil Co 


N.E. i See. 28, T. 31 S., R. 23 E., 
M.D.M. 


A-12 


Consolidated Mutual Oil Co 


N.W. i Sec. 28, T. 31 S., R. 23 E., 
M.D.M. 



CALIFORNIA PETROLEUM FIELDS. 



i)'o 



Suits. 



Producing companies 


Purchasing companies 


Naval 
reserve 


Receiver 


Maricopa Northern Oil Co.; Mid- 
way Northern Oil Co.; National 
Pacifle Oil Oo. 


General Petroleum 

Corp.; Standard Oil 
Co. 


Receiver 


ranmna Oil Co.; National Pacific 
Oil Co.; Whitakcr, Doan & Lay- 
mance. 


Standard Oil Co.; Gen- 

eral Petroleum Corp. 


Receiver 


Midland Oilfields Co., Ltd.; Tro- 
jan Oil Co.; California Amalga- 
mated Oil Co.; National Pacific 
Oil Co.; Miocene Oil Co.; El 
Dora Oil Co, 


General Petroleum 
Corp.; Standard Oil 
Co.; Independent Oil 
Producers Agency. 




Receiver 


General Petroleum Corp.; Obispo 
Oil Co.; Spreekels Oil Co.; Mari- 
copa Star Oil Co.; Pacific Mid- 
way Oil Co. 


General P e t r o 1 e u m 
Corp.; Standard Oil 
Co.; Independent Oil 
Producers Agency; Na- 
tional Oil Co. 




Receiver 


Union Oil Co.; iMirlwav Ficl(l.'< (HI 
Co. 


Union Oil Co.; Stand- 
ard Oil Co. 




Receiver 


Midland Oilfields Co., Ltd. 


Union Oil Co.... 


Receiver 








No production 




No. 1 


Receiver 










Brookshire Oil Co.; United Oil 


Standard Oil Co. 




Receiver 


Co. 








Brookshire Oil Co. _. _. 


Standard Oil Co.; Gen- 
eral Petroleum Corp. 




Receiver 






Brook.shire Oil Co.; Coalinga- 
Monterey Oil Co.; Midway Pa- 
cific Oil Co. 


Standard Oil Co.; Gen- 
eral Petroleum Corp. 




Receiver 


Devil's Den Cons. Oil Co. 


Associated Oil Co.; 
Standard Oil Co. 




Receiver 






California Midway Oil Co.; Buick 
Oil Co.; Associated Oil Co. 


Associated Oil Co.; 
Standard Oil Co. 




Receiver 


Chanslor-Canfield Midway Oil 


Standard Oil Co. 




Receiver 


Co.; Recovery Oil Co. 








Record Oil Co.; Consolidated Mu- 
tual Oil Co. 


Standard Oil Co.; Gen- 
eral Petroleum Corp.; 
Associated Oil Co. 


No. 2 


Receiver 


Consolidated Mutual Oil Co.; 
Standard Oil Co. 


Standard Oil Co.; Gen- No. 2 Receiver 
eral Petroleum Corp.; 
Associated Oil Co. 



56 



REPORT OP COMMITTEE ON PETROLEUM. 



TABLE 5 
Withdrawal 



Num- 
ber of 
suit 


Name of first defendant 


Land 


A-43 


Caribou Oil Mining Co 


S.E. i Sec. 28, T. 
M.D.M. 


31 S., R. 


23 E.. 


A-46 


General Petroleum Corp 


S.W. i Sec. 32, T. 
M.D M. 


31 S., R. 


24 E., 


A-47 


St. Helens Petroleum Co., Ltd 


S.E. i Sec. 32. T. 
M.D.M. 


31 S., R. 


24 E., 


A-48 


North American Oil Cons. 


All Sec. 2, T. 32 S., 


R. 23 E., 


M.D.M. 








A-49 


Standard Oil Co 


N.W. i Sec. 28, T. 
M.D.M. 


32 S., R. 


24 E., 


A-52 


Lost Hills Mining Co 


N.W. J and S.E. i 
R. 21 E., M.D.M. 


Sec. 30, T 


. 26 S., 







N.W. h N.E. k and S.W. 
T. 26 S., R. 21 E., M.D.M 


i 


Sec. 


32, 


A-53 


Rock Oil Co 


S.E. i Sec. 23, T. 31 S., 
M.D.M. 


R. 


22 


E., 


A-54 


Stockton Midway Oil Co 


S.E. i Sec. 14, T. 31 S., 
M.D.M. 


R. 


22 


E., 


A-56 


Pioneer Midway Oil Co 


N.E. h N.W. i and S.W. 
T. 31 S., R. 22 E., M.D.M. 


i 


Sec. 


12, 


A-57 


Lost Hills Mining Co 


S.W. i See. 18, T. 26 S., 
M.D.M. 


R. 


21 


E., 


A-58 


Dominion Oil Co. . _ 


N.W. i See. 15, T. 31 S.. 
M.D.M. 


R. 


22 


E 








A-64 


Pioneer Midway Oil Co 


N.W. h N.E. i and S.E. 
T. 31 S., R. 23 E., M.D.M 


i, i 


5ec. 


18, 


A-68 


Associated Oil Co ._ 


S.W. i Sec. 24, T. 30 S., 
M.D.M. 


R. 


23 


E, 








A-70 


Union Oil Co 


N.W\ i Sec. 34, T. 31 S., 
M.D.M. 


R. 


23 


E., 


A-71 


Union Oil Co 


S.E. i Sec. 34, T. 31 S., 
- M.D.M. 


R. 


23 


E 








A-72- 


Union Oil Co 


S.W. .i Sec. 34, T. 31 S., 
M.D.M. 


R. 


23 


E., 


A-73 


Union Oil Co 


N.E. i See. 34, T. 31 S., 
M.D.M. 


R. 


23 


E., 


A-74 


Midway Gas Co 


S.W. i Sec. 20, T. 31 S., 
M.D.M. 


R. 


23 


E, 









•One hundred acres of Pj'ramid Oil Co. 
tEighty acres of Rock Oil Co. 



CALIFORNIA PETROLEUM FIELDS. 



57 



— Continued. 
Suits. 



Producing companies 


Purchasing companies 


Naval 
reserve 


Receiver 


Caribou Oil Mining Co.; Califor- 
nia Amalgamated Oil Co., Ltd. 


Standard Oil Co 


No. 2 Receiver 


General Petroleum Corp.; Boston 
Pacific Oil Co. 


General Petroleum 
Corp.; Standard Oil 
Co. 


No. 2 


Receiver 


St. Helens Petroleum Co., Ltd.; 
Boston Pacific Oil Co. 


Union Oil Co.; Stand- 
ard Oil Co. 


No. 2 


Receiver 


North American Oil Cons. 


Union Oil Co 


No. 2 Receiver 






Standard Oil Co.; Pyramid Oil 
Co. 


Standard Oil Co.; Union Receiver 

Oil Co. * 


Universal Oil Co 


Associated Oil Co 


Receiver 


Rock Oil Co.; General Petroleum 
Corp. 


Standard Oil Co.; Gen- 
eral Petroleum Co. 




Receiver 

t 


General Petroleum Corp.; Stock- 
ton Midway Oil Co. 


General Petroleum 
Corp.; Standard Oil 
Co. 




Receiver 


Midlands Oilfields Co., Ltd. 










No production 






Receiver 








Dominion Oil Co.; Bankline Oil 
Co.; General Petroleum Corp. 


Independent Oil Pro- 
ducers Agency; Gen- 
eral Petroleum Corp. 


i 
i 


Midland Oilfields Co., Ltd 




No. 2 










No production 




No. 1 










Union Oil Co.; Associated Oil Co. 


Union Oil Co.; Asso- ' No. 2 
ciated Oil Co. 


Union Oil Co.; Associated Oil Co. 


Union Oil Co.; Asso- No. 2 
ciated Oil Co. 


Union Oil Co.; Associated Oil Co. 


Union Oil Co.; Asso- No. 2 
ciated Oil Co. 


Union Oil Co.; Associated Oil Co. 


Unioti Oil Co.; Asso- ' No. 2 
ciated Oil Co. j 


Associated Oil Co.; United Oil Co. 


Associated Oil Co.; ; No. 2 
Standard Oil Co. 



58 



KlOI'Oiri' ()!•' COMMI'I"!'!';!'; ON I'KTKOLKI ' M . 



TAMI.IC n 

Willidid iidl 



Nuin- 
lier of 

Hlllt 


Niimo (>r (list (Uifundiiiit 


I.niul 


A-75 


United Oil Oo. 


N.W. i Sec. 20, T. 31 S.. R. 23 E., 
M.D.M. 


B-1 


Associutod Oil Oo 

Soiillicni Oiililoriiiii (ins. Co. 


N.K. ;} Soc. 20, 'J\ 31 S., U. 23 E.. 
M.D.M. 


B-2 


S.E. i Scf!. 2(1, '!'. ;!l S., n. 23 E., 
M.D.M. 


B-3 


StjiiKliin! Oil Oo. 


N.W. J Sec. 22, T. 31 S., R. 23 E., 
M.D.M. 


B-4 


Stiindiird Oil Oo 


N.E. i See. 22, T. 31 S., R. 23 E., 






M.D.M. 


li-5 Associated Oil Co.... 


S.E. .i Sec. 22, T. 31 S., U. 23 E., 
M.D.M. 


B-6 


Southern Ouliforniii Gas Oo. 


K.VV. .1 See. 22, T. 31 S.. R. 23 E., 
M ]).M. 


J5-7 


SliiiHliird Oil Oo 


N.W. J, Src. 20, T. 31 S., \l. 23 E., 
M.D.M. 


B-8 


Staii'liird Oil Oo 


S.K. 1 Sec. 20, T. 31 S., 11. 23 E., 
M.D.M. 


B-9 


StaiHliird oil Oo. 


N.E. J Sec. 20, T. 31 S., R. 23 E.. 
M.D.M. 


JMO 


Oaliroriiia Mi<i\V!i.v Oil Oo 


N.W. .1 Sec. 32, T. 31 S., R. 23 E., 
M.D.M. 


B-11 


Oonsolidatod Mutual Oil Oo 


S.W. i Sec. 28, T. 31 S., R. 23 E., 
M.D.M. 


B-1 2 


Honolulu ('(uis. Oil Oo 


N.W. .1 Sec. 1, T. 32 S., U. 24 E., 
M.D.M. 


B-1 3 


Honolulu Oons. Oil Oo 


S.W. J Sec. 4, T. 32 S., R. 24 E., 






M.D.M. 


B-1 4 


Honolulu Oons. Oil Oo 


S.E. i Sec. 4, T. 32 S., R. 24 E., 
M.D.M. 


B-15 


HoiKdnlu Oons. Oil Oo 


N.W. 1 See. 0, T. 32 S., R. 24 E., 
M.D.M. 


B-16 


Honolulu Oon.'». Oil Oo. ... 


N.W. 1 Sec. M, T. 32 S., R. 24 E., 






M.D.M. 


B47 


Honolulu Oons. Oil Oo 


N.E. k Sec. 14, T. 32 S., R. 24 E., 
M.D.M. 


B-18 


Honolulu Oons. Oil Oo 


S.E. i Sec. 14. -T. 32 S.. R. 24 E., 
M.D.M. 



CALIFORNIA PETROLEUM FIELDS. 



59 



— Continued. 
Suits. 



Producing companies 


Purchasing companies 


Naval 
reserve 


Iteceiver 


Associated Oil Co.; United Oil Co. 


Associated Oil Co.; 
Standard Oil Co. 


No. 2 




Associated Oil Co.; United Oil Co. 


Associated Oil Co 


No. 2 


Associated Oil Co.; United Oil Co. 


Associated Oil Co.; 
■Standard Oil Co. 


No. 2 

1 


Standard Oil Co.; Associated Oil 
Co. 


Standard Oil Co.; Asso- 
ciated Oil Co. 


No. 2 




Standard Oil Co.; Associated Oil 
Co, 


Standard Oil Co.; Asso- 
ciated Oil Co. 


No. 2 




Standard Oil Co.; Associated Oil 
Co. 


Standard Oil Co.; Asso- No. 2 
ciated Oil Co. 


Standard Oil Co.; Associated Oil 
Co. 


Standard Oil Co.; Asso- 
ciated Oil Co. 


No. 2 


Standard Oil Co.; Associated Oil 
Co. 


Standard Oil Co.; Asso- 
ciated Oil Co. 


No. 2 




Standard Oil Co.; Associated Oil 
Co. 


Standard Oil Co.; Asso- 
ciated Oil Co. 


No. 2 




Standard Oil Co.; Associated Oil 
Co. 


Standard Oil Co.; Asso- 
ciated Oil Co. 


No. 2 

















California Midway Oil Co.; Asso- 
ciated Oil Co. 


Standard Oil Co. 
ciated Oil Co. 


; Asso- 








Consolidated Mutual Oil Co.; 
United Oil Co. 


Standard Oil Co. 
ciated Oil Co. 
eral Petroleum 


; Asso- 
; Gen- 
Corp. 


No. 


2 




Honolulu Consolidated Oil Co.-.. 


Standard Oil Co.. 




No. 


2 




Honolulu Consolidated Oil Co 


Standard Oil Co.. 




No. 


2 




Honolulu Consolidated Oil Co.... 


Standard Oil Co.. 




No. 


2 




Honolulu Consolidated Oil Co.... 


Standard Oil Co.. 




No. 


2 




Honolulu Consolidated Oil Co 


Standard Oil Co.. 




No. 


2 




Honolulu Consolidated Oil Co 


Standard Oil Co.. 




No. 


2 




Honolulu Consolidated Oil Co... . 


Standard Oil Co.. 




No. 


2 





60 



REPORT OF COMMITTEE ON PETROLEUM. 



TABLE 5 
Withdrawal 



Num- 
ber of 
suit 


Name of first defendant 


Land 


B-19 


Honolulu Cons. Oil Co 


S.W. i Sec. 14, T. 32 S.. R. 24 E.. 
M.D.M. 


B-20 


Honolulu Cons. Oil Co 


S.W. i Sec. 12, T. 32 S., R. 24 £., 
M.D.M. 


B-21 


Honolulu Cons. Oil Co 


S.W. i Sec. 6, T. 32 S., R. 24 E., 
M.D.M. 


B-22 


Honolulu Cons. Oil Co 


N.E. 1 Sec. 6, T. 32 S., R. 24 E.. 
M.D.M. 


B-23 


Honolulu Cons. Oil Co 


S.E. i Sec. 6, T. 32 S., R. 24 E., 






M.D.M. 


B-24 


Honolulu Cons. Oil Co 


S.E. i Sec. 8, T. 32 S., R. 24 E., 
M.D.M. 


B-25 


Honolulu Cons. Oil Co 


N.W. i Sec. 8, T. 32 S., R. 24 E., 
M.D.M. 


B-26 Honolulu Cons. Oil Co 


S.W. i Sec. 8, T. 32 S., R. 24 E., 
M.D.M. 


B-27 


Honolulu Cons. Oil Co 


N.E. i Sec. 8, T. 32 S., R. 24 E., 
M.D.M. 


E-28 
B-35 


Honolulu Cons. Oil Co 


N.W. i Sec. 12, T. 32 S., R. 24 E., 
M.D.M. 


Standard Oil Co 


S.W. i See. 12, T. 32 S., R. 23 E., 
M.D.M. 


B-36 Standard Oil Go 


N.W. i Sec. 12, T. 32 S., R. 23 E., 
M.D.M. 


B-37 Standard Oil Co 


N.E. J Sec. 12, T. 32 S., R. 23 E., 
M.D.M. 


B-38 


Standard Oil Co. — - 


S.E. i Sec. 12, T. 32 S., R. 23 E., 




M.D.M. 


B-39 


Standard Oil Co 


N.E. i Sec. 18, T. 32 S., R. 24 E., 




M.D.M. 


B-40 1 Standard Oil Co 

1 


N.W. i Sec. 18, T. 32 S., R. 24 E., 
M.D.M. 


B-42 Associated Oil Co 


N.E. k Sec. 35, T. 31 S.. R. 22 E.. 
M.D.M. 


B-43 


American Oilfields Co., Ltd.. 


N.E. i Sec. 32, T. 32 S., R. 24 E., 






M.D.M. 


B-44 


Brookshire Oil Co 


S.W. J Sec. 24, T. 31 S., R. 22 E., 
M.D.M. 



CALIFORNIA PETROLEUM FIELDS. 



61 



— Continued. 
Suits. 



Producing companies 



Purcliasing companies 



Naval 
reserve 



Honolulu Consolidated Oil Co Standard Oil Co 



Honolulu Consolidated 


Oil Co.— 


Honolulu Consolidated 


Oil Co.--. 


Honolulu Consolidated 


Oil Co.— 


Honolulu Consolidated 


Oil 


Co.— 


Honolulu Consolidated 


Oil 


Co.— 


Honolulu Consolidated 


Oil Co.— 


Honolulu Consolidated 


Oil 


Co.— 


Honolulu Consolidated 


Oil 


Co.— 


Honolulu Consolidated 


Oil Co.— 


No production 




No production 




Standard Oil Co 




No production 




Standard Oil Co. 




Standard Oil Co 




Associated Oil Co 




American Oilfields Co., 1 


.td. 









Brookshire Oil Co.; San Fran- 
cisco Midway Oil Co. 



Standard Oil Co. 



Standard Oil Co 



Standard Oil Co. 



Standard Oil Co. 



Standard Oil Co. 



No. 2 



No. 2 



No. 2 



No. 2 



No. 2 



No. 2 



Standard Oil Co I No. 2 



Standard Oil Co I No. 2 



Standard Oil Co. 



Standard Oil Co. 



Standard Oil Co.. 



No. 2 



No. 2 



No. 2 



No. 2 



No. 2 



No. 2 



Standard Oil Co.. 



No. 2 



Standard Oil Co.. 



Associated Oil Co. 



Standard Oil Co. 



Standard Oil Oo. 



No. 2 



62 HKl'OKT OF ('().MMri"l'KK ON I'lO'l'I^Ol -KM M . 

We licrcwitli i^ivc ;i Ijricf rdVrcnrc lo cncli I'cportcd decision in 
llic ('jilironii;! w it lidrawjil suits as well as a ccrcreiu't' to the deci- 
sion of tlie Siii)i'(Mnc Court of the United States in the Midwest Oil 
Company case. We do not intend to discuss the principlas of law 
(^stablislied, l)ut merely to state the nature of the decree entered in 
each case. 

In all tile ("aliinrnia withdrawal suits the ^•o\('riunenl asks relief l)y 
hills in ei|ui1y as follows : 

'!'() stay waste ; 

To preserve the pi-operty dui'inu' the ])endency of patent pro- 
ceedings hel'cuv^ \ho local and .u'enei'al land office; 

h\)y the ap|)(iint nient ef a rec(>iver ; 

To remove cloud from the title; and 

To recover possession and damai^'cs on accoinit ol' the i-emoval of 
oil and injui-y to the oil (le])o<its. 

Iiiihd Sidles vs. Midwaji Sorlhivn Oil Co. d al., Case No. 47, 210 
Ked. S()2. decided on May 2!), 1!)U. affects the N. W. \ of section 32, 
township 12 north, ranyc 2:5 west, S. li. M., which land was entei'cd 
upon suhseipient to the withdrawal order ol' Septend)er 27, 1!M)!), foi* 
the purpose ol' exi)l(U'inii' for oil. Dooliuii', District eludn'c, held that 
the withdi-awal order was Noid and accordin.u'Iy dismisseil the bill. 
Sul)-('(pient to the decision of the Supi'eme (\)urt of the United States 
in I'liihd Sidles vs. Mi(lir(sl Oil Com pa it fj cl (iL. hereinafter referred 
to, a petition for rehearinji,' herein \va.s granted. See Unilcd Slates vs. 
Midway Northern Oil Co. cl ah, 238 Fed. 619, 623, 624. 

I'niled States vs. McCutclien el al., Ca.se No. A-12, 217 Fed. 650, 
decided on September 1, 1914, atfects the S. W. ] of section 32, township 
12 noi'th, ranii'e 23 west, S. B. M., on which land oil had been discovered. 
Dooling, District .ludiic, held that the entire situation was too clouded 
to wai-rant the court at that time in dist ui'hinn' the possession of the 
operating c()ni|)anies and denied the motion for the appointment of a 
I'eceivei'. The government's moli(Ui for the api)ointment of a r'(>cciver 
was later granted. 2;U Fed. 702. 

In I'irihd Slahs vs. Midnusl Oil Ciniixiin/ el al., 231! U. S. 459, 
decided on l^\'i)ruary 23, 191"). iuvolxing certain oil lands in Wyoming 
in which cnti-y was made subseipu'ut lo the withdrawal order of Sep- 
tember 27, 190!), the United Slates filed a bill in eipiity to enjoin opera- 
tions on the land and for an accounting. The Supreme Court 
announced that the sole ([uestion at issue was tlie validity of the 
withdrawal order of September 27, 1909, and held that the order wa.s 
valid. 

El Dora Oil Company vs. United Slates, Case No. A-3, 229 Fed. 946, 
decided on December 31, 1915, alTects the S. E. | of section 32, towmship 



CAIilFORNIA PIOTR()I;l<:iiM FIKLDS. (iM 

12 11(11-1 li, r;iii,u(' "I'A west, S. I>. M. Tlic (lirciiit (/Onrt of Appeals 
jirfiniu'd iiii ordci' ufjiiit iiiu ;i picl iitiiii.'iry iiijuiicl ion jitid ;i|)p()iiil iii^ ;i 
receiver. 

I'nihd S/dhs vs. Midway NorUi<rii Oil Co. (I <il., (Consolidated CasoH 
Nos. 47, A-2. A-3, A-13, A-3() and A-'M. 232 Ke.I. 019, decided on May 1, 
lilHJ, affeets tlio following land : in Case No. 47, N. W. ^ of section 32. 
township 12 norlli, ranyc 23 west. S. B. M.; in (!ase No. A-2, fraetional 
S(H'ti()n 30. 1()\vnslii|) 12 iiorlli, range 23 west, S. )>. M. ; in CUise No. A-3, 
S. E. I of section 32, townslii]) 12 north, range 23) west, 8. H. M. ; in 
Case No. A-13, S. W. j of .'■ection 4, townshi[) 11 nortli, range 23 west, 
S. II M.; in Case No. A-30, N. E. j of section 32, township 12 north, 
range 23 west, S. H. iM.; and in Case No. A-3,1, S. E. { of section 26, 
township 30 north, range 2)5 west, S. 1^. M. Discoveries of oil were all 
made snbse(|uent to tlie willidrawal order of S( pleniher 27, 11)00. H(!an, 
Disti'ict Judge, dismissed the hills with respect to the marketing com- 
panies without prejudice to the right of the governn)ent to sue at law, 
it it slioidd so elect. Tlie court assigned the cases to a mastcu" to 
ascei'tain and repor't the sums due f'l-om the defendants to the govcirn- 
ment, such sums to he computed on principles laid down in 1h(i decision. 
The court indiiated that upon the coming in of I lie master's re[)ort a 
decree would Ix; entered ousting the operating companies from their 
possession and restoring possession to the govei*nni(!nt. 

llniled Slairs vs. MriUilrlu)! (I (d., Case No. A-12; United, Slates vs. 
Kiiiscjj (t al., Case No. A-13, and United Stales vs. Midland Oilfields 
Co. et at., Case No. A-30, 234 Fed. 702, decided on July 12, 1915, alfect 
the following lands: In (!as(! No. A-12, S. W. 1 of section 32, township 
12 nortli, range 23 west. S. H. M. ; in (jase No. A-13, S. W. | of section 
4, township 11 nortli, range 23 west, S. H. TNT.; and in case No. A-30, 
N. E. ] of section 32. towiislii|) 12 iKu-tli, range 2:'> west, S. H. M. 
liledsoe, IJistr'ict .Judge, granted motions of the government for injunc- 
tions to stay waste and for the appointment of receivers. 

C nihil States vs. I>( ril'.s Din Consotidalid Oil ('ompany et at., Case 
No. A-37; United Statis vs. I.ost Hills Minint/ Coni/xiny <l at., ('ase 
No. A-r)2, and U nHe<l Slates vs. Ijost Hills Mininy Cinapavy el al., (Jasi; 
No. A-r)7, 23() Fed. 973, decided on October 4, 1910, affect oil lands 
in tli(! Lost Hills (ield as Follows: In ( !ase No. A-37, N. E. j of section 
30, townshi]) 2(5 south, range 21 cast, M. 1). M. ; in Case No. A-52, 
N. W. \ and S. E. .] of section 30 and N. W. J, N. E. :]■ and 8. W. -j of 
section 32, townshi]) 2(5 south, range 21 east, M. I). Al. ; and in Case No. 
A-57, 8. W. \ of section IS, townshi[) 2(5 south, range 21 cast, M. D. M. 
Hean, District Judge, appointed a receiv(^r for all the land affected 
except the south I of section 22. 



64 REPORT OF COMMITTEE ON PETROLEUM. 

United States vs. McCutchen et al., Case No. A-12, 238 Fed. 575, 
decided on July 29, 1916, affects S. W. 1 of section 32, township 12 
ncHh, range 23 west. S. B. ]\I. Bledsoe, District Judge, directed the 
master to report npon all oil produced from the property and purchased 
l)y the marketing (•om]>anies, whereupon the court will make its further 
order. 

U)tit((l States vs. StoeJdon Midway Oil Compani) et al., Case No. 
A-54, 240 Fed. 1006, decided on January 5, 1917, affects S. E. ^ of 
section 14, township 31 south, range 22 east, M. D. JM. Bledsoe, District 
Judge, granted the motions of the government for an injunction in 
restraint of waste and for the appointment of a receiver. 

United States vs. Brookshire Oil Compaiiij et al., Case No. A-34; 
United States vs. Brookshire Oil (knnpany et al., Case No. A-35, and 
United States vs. Brookshire Oil Uompanij et al.. Case No. A-36, decided 
on June 7, 1917, affect the S. E. ], the N. E. \ and the N. W. I, respec- 
tively, of section 24, township 31 south, range 22 east, M. D. M. Bean, 
District Judge, held that these tliree quarter sections of land had been 
located l)y dunniiy entrymen and that the government was entitled to 
a decree enjcining the defendants from committing waste. He further 
lield that the i)laintift' being admittedly out of possession, a decree 
quieting title could not be entered in an equity proceeding. Judge 
Bean dismissed the proceedings with reference to the marketing or 
producing companies. 

United States vs. TJtirty-tiro Od Company et al., Case No. A-38, 
decided on June 7, 1917, affects the N. E. ^ of section 32, township 31 
south, range 21 east, M. D. M. Bean, District Judge, held that this was 
also a case of dummy entrj'men and that the defendants did not bring 
themselves within the provisions of the Pickett Act. Judge Bean held 
that the government was entitled to a decree enjoining waste except as 
to the marketing or producing companies and a number of defendants 
who had parted with their interests in the property prior to the com- 
mencement of the suit. 

United States vs. Record Oil Company et al., Case No. A-41 ; United 
States vs. Consolidated Mutual Oil Company et al., Case No. A-42, and 
United Stales vs. Caribou Oil Mining Company et al., Case No. A-43, 
decided on June 7, 1917, affect the N. E. :}, the N. AV. \ and the S. E. i, 
]-espectively, of section 28, township 31 south, range 21 east, M. D. M. 
This property is located in Naval Reserve No. 2. Judge Bean drew 
attention to the fact that final certificate had been issued by the Regis- 
trar of the Land Office in these cases and that the issue of patent is 
now pending before the Department of the Interior, and concluded that 
under these circumstances the federal court was without jurisdiction. 
lie accordingly directed that these three proceedings be dismissed. 



CALIFORNIA PETROLEUM FIELDS. 65 

United States vs. North American Oil Company et al., Case No. A-48, 
cleeided on June 11, 1917, affects section 2, township 32 south, range 
23 east, M. D. M. Bean, District Judge, found that the predecessors 
of tlie defendants now claiming the land brought themselves within the 
provisions of the Pickett Act ; that work leading to discovery had been 
prosecuted with necessary diligence both before and after the with- 
drawal order of September 27, 1909, until discovery was made on each 
of the four quarter sections of land involved and that the bill should be 
dismissed. Judge Bean, in this case, established certain principles 
which will be of signal importance in a number of other withdrawal 
suits now pending. The land affected is located in Naval Reserve No. 2. 



5—31469 



Jr/TTS Coi/A/C/^. 0£ 0£££A/S£ 



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s^^^ 



■70 7?f/f//s/'o/?r/7r/o/v 



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t 






?1 



ounted 
■ oil, as 
n witli 



Jr/TTS C01//VC/L or 0£/='£f^s5£ 




Pictorial Diagpam 


OF THE 

Crupe Oil Inpustry 


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\^o^-\::>^si<^09J^ 




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Y5lTaUQI/lI JlO 3oy^O 



CHAPTER IV. 




?E£ ^MD bl^lCE 



at all the oil produced in any given period of tnne can be accounted 

r in that same period. In that respect, the movement of oil, as 

' own in Plate VIII, may be compared to a great river system with 



Pl/fTEJK. 



Production, Shipments. ST0R<q6E /imp Price 

CffUFORNM C^aD£ 0/L 
JjlNMRY /9/3-JUN£ /9/7 





-4- - *-i 



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CHAPTER IV. 

PRODUCTION OF CALIFORNIA PETROLEUM. 

I. G( )i( ral SUitonoit. 
1. Discussion of Statistics. 

In this chapter and the fonr following chapters statistics of the Cali- 
fornia oil indnstry will be considered in detail. First, as a basis for 
estimating the future production, the recent output of various districts 
will be compared ; and finally, a.s a gauge of future demand, the past 
utilization of oil will be shown. In this investigation the controlling- 
factor to be recognized in a study of production is the availability of 
the oil, which includes the relative difficulty of both production and 
distribution to point of use. 

The production of crude oil from the fields of California has been 
carefully recorded for years by marketing companies of the state and 
by the California State Mining Bureau. However, the analysis of these 
published figures has rarely been attempted by anyone outside of the 
oil industry, and the interpretation by the oil producers of their own 
production statistics has not always been correct. This is not sur- 
prising, in view of the fact that the history of the oil business in 
America shows rapid changes, and the discovery of new fields and the 
sudden exhaustion of pools has often upset forecasts of production and 
price. 

2. Definitions of Production Terms. 

Before taking up the discussion of detail, some definition of terms of 
production is required. In these statistical chapters, gross production 
will be used to designate a total quantity of oil brought to the surface 
of the ground. Production will indicate the net quantity remaining 
after field con.sumption and loss are deducted from gross production. 
This will be the amount shipped from the field in pipe lines or tank 
cars. The term delivered proeluction will be applied to the quantity 
of oil delivered by pipe lines to the refineries and reshipment ports, 
together with tank car shipments from the fields. This quantity will 
equal the difference between net production and pipe line consumption 
and loss. 

The relation between the present gross production and the utiliza- 
tion is shown in Plate XXVI. 

3. Necessary Assumptions. 

For the purpose of this report, it is necessary to make the assumption 

that all the oil produced in any given period of time can be accounted 

for in that same period. In that respect, the movement of oil, as 

shown in Plate VIII, may be compared to a great river system with 



68 REPORT OF COMMITTEE ON PETROLEUM. 

many tributary streams and many reservoirs and diversion canals 
through which the vi^ater is distributed for use before it is finally dis- 
charged into the ocean through a delta. The constant change in pro- 
duction and demand for oil has the same effect as the seasonal variation 
on the flow and use of water, and not only the storage stocks, but the 
oil in the pipe lines and in the process of manufacture forms a reserve 
with constantly fluctuating level, which prevents an actual exact balance 
between production and utilization. 

As a matter of fact, the exact measure of oil produced in any period 
is impossible. This is partly due to the fact that all oil is sold and 
measured with an allowable 3 per cent of water and sediment. For 
this reason the statistical figures in this report are in most instances 
given to the nearest 10,000 barrels, and, for the purpose of comparison, 
it is assumed that in any period the quantity of oil utilized can be 
determined by taking into account, first, the quantity produced ; second, 
the amount used or wasted in the industry itself, and third, the varia- 
tion in the quantity in storage. 

II. Present Production. 

The present gross production is approximately 8,000,000 barrels of 
oil per month. In addition to this, an average of 1,100,000 barrels per 
month has been drawn from storage in the last year and a half. The 
quantity of oil used in the fields in drilling and pumping amounts to 
approximately 260,000 barrels per month. The amount used in the 
X^umping stations along the pipe lines, together with the -wastage of 
oil through seepage and evaporation, is estimated at 210,000 barrels 
per month, while the quantity burned under the stills of the various 
refineries is approximately 260,000 barrels per month. 

The net amount of oil utilized is, therefore, 8,370,000 barrels, of 
which amount 7,000,000 barrels are burned under boilers, as fuel oil, 
and the balance, 1,370,000, is distributed as various refined products. 

The general description of the oil fields of the state and the history 
of their production is given in Chapter III. The relation between 
supply and demand and price is shown in Plate IX, and requires but 
little comment. The change from the overproduction of 1914 to the 
present shortage, with the corresponding increase in price paid in the 
field, are the most prominent features to be noted. 

III. Production hy Districts. 

In Table 6 and in Plates X and XI the actual production of the 

principal fields of the state is shown. This classification of fields is the 

one usually followed, but in order to simplify the figures and at the 

same time bring out certain features in regard to the state's produc- 



PRODUCTION OV CALIFORNIA PETROLEUM. 



69 



tivity, a grouping of these fields into districts is shown in Table 7 and 
in Plate XII. 




^riLOiSMIVI 



H. 



wei 



increasing. This oil is almost entirely retined and only the residuum is 
used as fuel. 



PtffTSX 



Production of Crude Oil in C/mroRNirt 








68 



REPORT OF COMM 



immy tributary streams and in 
tl...n,., J-.-^J-: ->•*'>=■» s=f!to^-i"-4'---*i!- 



TT 



\\\N\\ 



'■") 






i 



one usually followed, but in ord< 
same time bring out certain feat 



PRODUCTION OK CALIFORNIA PETROLEUM. 69 

tivity, a grouping of these fields into districts is shown in Table 7 and 
in Plate XII. 

The fields on the west side of the San Joaquin Valley form a goo- 
graphic unit wlicre the essential features of development and transpor- 
tation are alike, since the productive area is separated from the main 
line of railroads by sparsely-settled territory and from tide water by 
mountain ranges. This group of fields has produced as high as three- 
fourths of the .state's annual output and is now maintaining two-thirds 
of California's production. Approximately 47 per cent of the present 
producing wells of the state and 60 per cent of the present drilling are 
in this area. Nearly all the flowing wells of the state are in this dis- 
trict, and Plates XIV and XXXIII, showing the present production per 
well per day for each field, expresses their relative importance. As 
stated in Chapter III, there is a wide range of gravity in the oil from 
this district. At the present time, approximately 60 per cent of the 
production is sent to refineries of the state for treatment, and a greater 
amount even of the heavier oil now sold direct for fuel contains a large 
percentage of lul)ricating stock which could and should be recovered. 

The Kern River field is in a favorable natural location for supplying 
fuel oil to railroads, but must ship through long pipe lines or over 
long rail routes to supply other markets. As shown in Plate X, the 
production of this field declined rapidly between 1911 and 1914. Since 
the latter date the output has slightly increased, due to the stimulant 
ni. the rising price of crude oil and the opening and pumping of wells. 
Al the present time one-cjuarter of the producing wells of the state are 
in this field, but the output is only 9 per cent of the state's total. A 
few wells are now being drilled in the western extension of this field, 
u territory only partially proven. The oil from this district is heavy 
jind is used almost entirely for fuel purposes. 

The Whittier-Fullerton district includes a number of small pools 
whicli are fully developed and are producing only small quantities of 
oil, and also includes the Coyote and Montebello areas, Avith large out- 
puts per well and rich po.ssibilities for the future. The district is in 
an ideal location for the supply of local southern California markets, 
is close to tide water and to the trunk lines of the railroads for sup- 
plying locomotive fuel or oil for shipment to the interior points, but 
is dependent upon vessel shipment to reach the northern California or 
northwestern market. Taken as a whole, this district maintains about 
one-sixth of the present state output of crude oil from 8 per cent of 
the pi-oducing wells. Approximately one-fifth of the present drilling 
wells of the state are in this area, and the monthly production is steadily 
increasing. This oil is almost entirely refined and only the residuum is 
used as fuel. 



70 REPORT OP COMiMITTEE ON i'KTROLEUM. 

The Southern Coast distriet, as arbitrarily established, includes the 
Los Angeles, Salt Lake and scattered Ventura fields. The majority of 
the wells are in a favorable location as regards distribution of the oil to 
market, but the smjall pools included in the district are either so widely 
scattered or so nearly exhausted as to play a relatively unimportant part 
in the industry of the state. Only one-fortieth of the present state out- 
put comes from this district, which includes nearly 15 per cent of the 
producing wells. The maxinuim production of this district was reached 
in 1908, and a steady decline has followed since that date. Approxi- 
mately one-half of this oil is sent directly to refineries and the balance 
is used as fuel and road oils. 

The Central Coast area is easily tributary to tidewater and steamer 
transportation, but is largely dependent ui)on tankers for the ultimate 
disti-il)ution of the oil. 

Tal)le 7 and Plate XI show the relative importance of this area and 
its ])resent production. The Santa Maria field ha.s declined steadily 
since 1908, but extensive development is now being carried on in new 
territory adjacent to the old pools. The greater part of the oil pro- 
duced here is sold directly as fuel, but plans are being executed to 
refine a greater proportion in the future. 

IV. Anali/sis of Production Figures. 

The total production of the state is shown in Tal)le 6 and the char- 
acter of the oil produced in Plate XV. 

The change in the character of the oil produced in California is due 
to the decline in the output in the Kern River fields and the rapid 
increase in production of the ]\Iidway-Sunset district, following the 
discovery of oil in Buena Vista Hills and Sunset Flat in 1909, and the 
development in Coyote Hills since 1913. 

A study of the curves in Plates X and XI will show that the Whittier- 
Fullerton and Lost Hills-Belridge are the only important areas wheie 
the production curve has not crossed its peak. The East Coalinga 
field in the West San Joaquin .district is now increasing its output, , 
owing to a very intensive drilling campaign, but on account of the 
decline of old Avells it is not probable that production from this district 
will ever reach the high-water mark of 1912. In the ^Midway-Sunset 
field, which is the most productive area in the state, the decline in pro- 
duction is very rapid. 

The outstanding fact in regard to tlu' output of petroleum of Califor- 
nia is the monthly decline of production, well by well, throughout all 
1h(" (iclds. ]*late XIII. i)rei)a red by tlie Appraisal Committee of the 
independent Oil Producers' Agency and published through the courtesy 
of this agency, shows this fact very clearly. 



PRODUCTION OF CALIFORNIA PETROLEUM, 



71 



The obvious fact that each new producing' well in a district adds to 
the difficulty of maintaining production is not clearly recognized by the 

" It 



public which is unfamiliar with tJip_r-e"'.o?*-ii%-p-±' 

.~rn:rn:: r,i ].i ; ' JTT 

it 



j„_iu_^_ 




K\\\K^ 







viwiuuai 

owners. This is largely due to the fact that expensive installations of 
pipes and gas compressors are required to separate and handle the o-as 



PLt^T£3I 



Production ofCrupeOilin C^UFORNifi 

Co^ST Afsfo Southern F/EiDs 
^Awa^L Output /Af Barrels by Helds 




70 



REPORT OF COiM 



The Soiitheni Coast disti-ict, 
Los Angeles, Salt Lake and se; 
the wells are in a favorable loc 
market, but the snijall pools in' 




of this agency 



PRODUCTION OF CALIFORNIA PETROLEUM, 71 

The Obvious fact that eacli new producing, well in a district adds to 
he^ditficulty of niaintaining production is not clearly recognized by the 
•ublic which IS unfamiliar with thp T.a^oj.^^_^i- .4«-i.:-,.,_ ^_i. -* -p 

l- 
t 
I. 

V 
1 



1 




L QirMErra 



neld l„.s i.s „„ the properties hancllecl as .s,„„ll units l3v indi'vijal 
eis. Jl„s .s largely due to the fact that expensive installaf im f 
"« and gas eo™pressors are required to separ'ate and Ce the gL 



Pl/:jTE33r 



Propuction m\> Pevelopmentof CflUFPRwifl Oil Fielps 

St/ow/A/a Output of Wells. Number ofP^odj/c/j^o y/£U3 
i^ND Number OF Wells P^iLUNG 




70 



REPORT OF COMM' 



The Southern Coast distriet. 
Los Angeles, Salt Lake and sea^ 
the wells are in a favorable loea 
iHiirk"^ '"'^ <lip riuaII uools ine 




: *■ 























W^ 



c:^^' 



r\>.. 






of this . 



PRODUCTION OP CALIFORNIA PETROLEUM. 



71 



Tli(^ obvious fact that each 



new producing- well in a district adds to 

the 
It 



e difficult, of ,„ai„tai„i„« ....odn^tion „ „,; de ri ;:;/;:' 
il'lio wlnoh IS imfaiiiiliar with thp ™,.„-^. .,f .,...,L '"^""■^'^ "> 




^^I^EVtAAQir 



». This i. larselv <J ueto h. 1 t . ! ' """■" ''-'^ ''"lividuHl 



PurrexiIL 



Pecline in Propuction 

^v£Ri9G£ Wells 
CmifornmFjelds 




\ \ \ ^ X s: v>^'\|: CQ {\4 (\| rvj 



^ vs K 



5^ c\.Ci 



t\| t\| fyjj fVj fVj Kr^ 



70 



REPORT OF COM 



The Southern Coast district 
Los Angeles, Salt Lake and sc 
the wells are in a favorable lo 







T 



C)C)\ 




% 
5 



of llli> 



PRODUCTION OP CALIFORNIA PETROLEUM. 71 

The obvious fact that each new producing well in a district adds to 
the difficulty of maintaining production is not clearly recognized by the 
public which is unfamiliar with the records of decline of oil wells. It 
is an axiom with the producers, however, and for California the drill- 
ing re(|uirements to meet the demands of production can be worked out 
with almost mathematical precision if a large territory is considered. 
This will be further discussed in Chapter X, and at this point it is only 
necessary to note the fact that the number of producing wells in each 
district has steadily grown, and that a much greater increase in the 
number of wells will be required to make a material change in the quan- 
tity of oil produced. 

V. Control of Oil Lands and Production. 

1. Advantage of Operation of Large Units. 

The oil lands in the State of California, and consequently the pro- 
duction, are very largely under the control of the large marketing 
companies. If a more complete control of small areas and the small 
operating companies had been possible in the past, the overproduction 
of 1913 and 1914 could have been checked and the present shortage 
^\ould not be so acute and could be faced with greater security. There 
can be no question as to the need of a large amount of capital and a 
through the comparison of accurately reported logs. 
thorough organization to handle the many problems of the oil industry. 

Some of the advantages of the operation of oil lands in large units, 
which are familiar to those engaged in field operations, are : 

First — The opportunity for careful study of drilling problems 

Second — -The protection of the oil sands from water, by reason of a 
uniform policy of development. 

Third — Economical drilling campaigns resulting in fewer wells, by 
eliminating the necessity of offset wells. 

Fourth — An efficient and well organized technical staff. 

Fifth — The opportunity for providing adequate storage and trans- 
portation facilities. 

Sixth — The relative ease of developing adequate water supply. 

Seventh — The economy of fuel and the conservation of the oil 
produced. 

Even the most superficial inspection of the California oil fields will 
convince anyone that the relatively greater efficiency of the larger pro- 
ducing companies as compared with the individual producers has 
saved a great quantity of oil and a large sum of money to the state of 
California. As an example, the greater part of the field consumption 
and field loss is on the properties handled as small units by individual 
owners. This is largely due to the fact that expensive installations of 
pipes and gas compressors are required to separate and handle the gas 



72 REPORT OP COMMITTEE ON PETROLEUM. 

produced with the oil, and such an instalhition is only practical where 
large quantities are handled. 

It should be borne in mind that the large companies are, by reason 
of their greater resources, under moral obligation to do more efficient 
work than the smaller competitors and that the state and nation should 
look to these companies to set the pace in the matter of intelligent 
conservation of oil. 

In the maintenance of production the drilling of lands in large tracts 
is especially important. Approximately two-thirds of the oil now pro- 
duced in California comes from lands owned by five large oil companies, 
and 60 per cent of the producing wells and of the wells being drilled 
in May, 1917, were on their lands. 

In Plate XXXX the recent drilling in the state is shown and the 
comparative figures show clearly the present attempt to increase pro- 
duction. 

The amount of mouey required to conduct extensive drilling, espe- 
cially at the present prices of material and labor, can be judged from 
the following figures. 

The cost of completing an oil well in California varies throughout 
the districts with the depth and conditions of drilling. It may be 
anywhere from $10,000 to $100,000, and as an average figure in a proved 
territory, the estimate of $10 to $15 per foot has been used by some 
companies. At the present prices of material, these estimated costs 
would be nearly doubled, so that a well 3,000 feet in depth might be 
expected to cost from $50,000 to $80,000. 

The following data have been obtained by summarizing and averaging 
the detailed reports and estimates made hy one of the larger companies 
in 1914. the basis of these reports being the normal price of material 
and labor prevailing in the various fields at that time. The present 
prices of materials are approximately 80 to 100 per cent higher, and of 
labor 40 to 50 per cent higher than in 1914; hence, the figures in the 
tables given below^ should be raised in these proportions to represent 
the present conditions. No attempt has been made to adjust the figures 
to present prices for the reason that during the present unsettled state 
of affairs, quotations and Avages are and will be subject to fluctuations 
for some time to come. 

Standard tools alone are usually used for drilling wells less than 
1,900 feet in depth in all fields in the San Joaquin Valley, in the 
Whittier-Fullerton and Coast districts at a cost of equipment ranging 
from $2,200 to $2,800 per well. 

Rotary tools, in com])ination with standard tools, are usually used 
for drilling wells greater than 1,900 feet in depth in all fields in the 
San Joaquin Valley and in the Whittier-Fullerton District, the rotary 



PRODUCTION OF CALIFORNIA PETROLEUM. 73 

being used for the greater part of the depth and the Standard tools 
being used to finish the well and drill into the oil sand. The cost of 
the combination rotary' and standard equipment ranges from $3,000 to 
$3,600 per rig. 

The cost of drilling wells may be conveniently considered under three 
heads : 

1. Surface equipment per well, which varies, in a general way, with 
the method of drilling and depth, and only in a minor way with the 
cost of material in the various fields. A few standards of surface equip- 
ment are sufficient for all cases. Given the field, the method of drilling 
and the general depth of the well, the proper standard is easily selected. 

2. Underground equipment, which varies, in a general wa}^, with the 
number of feet of depth, as well as the character of formation encoun- 
tered in drilling in the different fields; and only in a minor way with 
the cost of material in the various fields, as well as the method of 
drilling employed. 

3. Operating tools, which vary, in a general way, with the number 
of days necessary to drill a given well, as well as the method of drill- 
ing employed, and in a minor way with the cost of material and labor 
in the various fields. All the labor employed in drilling is included 
under this head. 

The example given herewith shows the cost of drilling a well in the 
Midway field 3,300 feet deep by the combination method, assuming the 
rotary tools to be stopped at 3,220 feet. This includes the cost per day 
of operating the tools for the different methods and the number of days 
necessary to drill the well to tlie given depth with standard tools and 
with rotary tools. 

Combination surface equipment for depths greater than 2,300 feet, 

San Joaquin Valley $3,600 00 

Combination underground equipment for Sunset-Midway District, 

3,300 feet at $4.29 per foot 14,157 00 

Operating tools — 
Rotary, 3,220 feet requires 171 days: 

For Sunset-Midway District, 171 days at $107.65 18,408 00 

Standard— Time for 3,220 feet, 267 days 
Time for 3,300 feet, 277 days 



DiflFerenee 80 feet, 10 days 

Plus 10 days 

For Sunset-Midway District 20 days at $55.65 1,113 00 



Total estimated cost of well $37,278 00 

At the present time, approximately 370 wells are being drilled in the 
state. Of these, 92, or approximately one-fourth, are owned by one 
company, which is expending each month over $400,000 on this develop- 
ment Avork and is using material purchased at a lower price than that 
now quoted by the supply companies. On this basis, the present cam- 
paign for oil is costing operators of the state about $20,000,000 a year. 



74 



REPORT OF COMMITTEE ON PETROLEUM. 



The amount of money expended in drilling in the five years from 
1912 to 1916, inclusive, can be estimated from the following figures : 



I 



Total 
depth, feet 



Average 
depth, feet 



Producing wells completed- 
Abandoned wells 



2,572 
506 



4,848,639 
1.075,807 



1,885 
2.126 



Assuming a cost of i|<10.00 per foot for drilling complete, the total 
cost of these wells was approximately $60,000,000. It is worthy of note 
that approximately one-fifth of the wells drilled in this period were 
failures. 

The hazard of the oil business can be judged from the above ratio, 
which applies to a period when the structural features of the oil fields 
of the state were well under.stood and the general drilling condition.s 
known, and also from the fact that one company in this same period 
spent over .^(iOO.OOO in a drilling compaign in one of the districts of 
southern California before any oil was obtained, while another company 
has recently spent an e(]vuTl ainount in a San Joaquin field in develop- 
ment work before any production was secured. Other similar instances 
might be given, and in many cases large amounts of money have been 
expended without success. 

In order that any company may maintain more than three or four 
rigs drilling at one time, a large supply of material is required and 
the best equipped companies have extensive shops, warehouses and 
yards. They are. therefore, able to take care of needed supplies and 
repairs at all times. One company reports a store account for drilling 
material of approximately $1,750,000. 

California State Mining Bureau, in Bulletin No. 73, has estimated 
that the present total investment in the oil business represents an 
expenditure of at least $250,000,000. 

2. Principal Operating Companies. 

The princij)al marketing companies and their influence in the dis- 
tricts discussed is. in general, as follows : 

The Standard Oil Company of California owns and controls land 
under lease in the West San Joacpiin, Kern River and Whittier- 
Fullerton districts. In the last district this company is at the present 
time by far the largest producer. In each of these districts the com- 
pany also purchases oil from individual producers. The entire con- 
trolled production of the Standard Oil Company is refined, and the 
organization is essentially planned for manufacturing and marketing 
the petroleum products. 

The Southei-n Pacific Company, thi-ough its fuel bureau, formerly 
known as the Kern Trading and Oil Company, owns the largest amount 



PRODUCTION OF CALIFORNIA PETROLEUM. (O 

of land, principally in the West San Joaqnin fields. This land is only 
partially developed and is now involved in the litig'ation discussed in 
Chapter III, which prevents further development. The K. T. & 0., 
as it was known, buys oil from small producers and from the marketing 
companies, and also exchanges the light refining oil produced from its 
land for heavier fuel oil or refinery residuum. It is not a marketing 
company, however, as it supplies its entire production to the Southern 
Pacific Company for operation of its locomotives. The Southern Pacific 
Company also controls the Associated Oil Company and the subsidiary 
Amalgamated Oil Company, through the ownership of 51 per cent of 
the stock of the Associated. The Associated Oil Company operates lands 
and buys oil in all the districts of the state except in Ventura County. 
Part of this oil is refined, and the company does a general marketing 
business and only part of its output goes to railway use. 

The Independent Oil Producers' Agency is an organization made up 
of over 100 small producers in the San Joaquin Valley. This agency 
was formed in order to get the advantage of organization in marketing 
their products. At the present time, the agency output is controlled 
through a contract with the Union Oil Company, which stipulates a fixed 
price to be paid for the oil as produced in the fields. 

The Union Oil Company, in addition to the control of the agency 
just mentioned, owns large areas of land in the AVhittier-Fullerton and 
Central Coast districts and smaller areas in the West San Joaquin and 
Kern River fields. This company buys oil in each of the fields Avhere 
operations are conducted, and is a general refining and marketing 
company. 

The Shell Company of California owns lands in the Coalinga, Ven- 
tura and Santa Maria fields, l)ut at the })resent time its only production 
is obtained in Coalinga. Like the Standard, all of this oil is refined 
and only sold after manufacture. 

Tlie Atchison, Topeka and Santa Fe Railway Company owns land and 
produces oil in West San Joaquin. Kern River and Whittier-Fullerton 
districts, through the ownership of two oil companies, Chanslor-Canfield 
Midway Oil Company and Petroleum Development Company. These 
companies act as a fuel bureau for the Santa Fe Railway, and no oil is 
sold for general consumption. 

In Table 8 the control of California production is given by fields. 

VI. Summa)'!/. 

To summarize tlie present condition of the California oil industry, 
as regards production, it is evident : 

First — That the gross production of oil in California has l)een prac- 
tically stationary for over a year at 8,000,000 barrels per month and is 
maintained at that figure only by an unprecedented activity in drilling. 



76 



REPORT OP COMMITTEE ON PETROLEUM. 



Second — That under existing conditions, as to land and material 
available for drilling, this production can not be long maintained, owing 
to the cumulative effect of the decline of old wells. 

Third — The oil industry is of such a nature that it can be carried 
on most economically and efficiently by companies with ample resources 
and large acreage. 

TABLE 

Toinl Production of Crude 
Total Production of Crude Oil in California From the Beginning of the 

[From Standard Oil 



Year 


Kern River 


McKittrick 


Midway 


Sunset 


Coallnga 


Santa Marla- 
Lompoc 


Prior 












1876 










1877 




1 


1878 


! 




1879 


1 




1880 


1 1 




1881 


t 




1882 


1 1 i 




1883 


' 




1884 






1885 


' ' 




1886 


1 




1887 


* 






1888 






1889 


i 1 




1890 


' 1 


* 




1891 


1 


* 




1892 


1 1 




1893 


i 1 . 




1894 


i 




1895 






1896 


' 


14,119 




1897 


1 


70,140 
154,000 
439,372 
547.960 




1898 


1 10,000 

* 15,000 
826 775 80 000 


i 




18C9 


1 _ 




1900 


* 12.^00 




1901 

1902 

1903 

19G4 

1905 

1906 

1907 

1908 

1909 

1910 

1911 

1912 

1913 

1914 

1915 

1916 


3,278,840 430,450 4,235 188.600 ! 525,433 

8,988,046 619,296 3,048 , 167,558 571,233 

16,342.099 1,353,206 27,305 352,565 2.138.058 

17,226,240 1.856.225 910 390,425 5,097,8.S3 

15,253,845 1,373,030 18,530 419,212 8,882,125 

12,825,166 680,756 11,800 307,550 ', 8.401,105 

12,346,014 2,415.840 149,944 704,805 ■ 8,996,268 

13,803,579 3,076,300 434,578 1,463.510 10,725.795 

14,508,242 5,807,360 2,234,455 1,999.701 15.406.619 

14,776,435 5,471,613 11,174,207 9,218.904 18,646,470 

14,078,890 5,477,532 , 21,584,602 5,559,069 18,311,251 

12,446,445 5,094,465 25,948.980 5.590.824 19,546,122 

9,980,940 4,496,842 33,040,129 5.984,651 18,604.626 

7,030,545 3,820,857 37.479,228 12.546.616 15.925.887 

8,034,974 3,552,801 33,211,486 , 6,006,607 13,548,159 

8,402,525 1 3,230,644 32,156,818 6,768,658 14,381,493 


* 

86,888 
204.890 
7(XI,450 
3.402.800 
4.799.411 
8,249.236 
8,699..3.50 
8,017.455 
7,607.830 
7.465,074 
6,801,9('6 
5,817.711 
4,30.3,a^() 
4.536.840 
4.422.410 


Totals. 


190,149,600 48,862,217 197,580,255 57,681,754 180,934,188 75,115.391 

1 1 



♦Indicates first well. 



PRODUCTION OF CALIFORNIA PETROLEUM. 



77 



6. 

Oil in California. 

Industry to December 31, 1916, by Fields — in Barrels (42 U. 

Bulletin, March, 1917.] 



S. Gallons). 



Newhall and 
Ventura 
County 



Los Angeles 

and 
Salt Lake 



Whittler- 
FuUei'ton 



Lost Hills- 
Beliidge 



Misoellaneoiis 



1,500 

16,904 

39,792 

130,136 

132,217 

208,370 

183,486 

203,616 

143,552 

131,125 

120,506 

96,871 

72,810 

69,060 

67,862 

66,338 

74,725 

71,255 

65,715 

62,406 

55,743 

53,000 

56,775 



2,123,764 



175,000 

12,000 

13,000 

15,227 

19,858 

40,552 

99,862 

128,636 

142,857 

262,000 

325,000 

377,145 

678,572 

690,333 

308,220 

807,360 

323,600 

385,049 

470,179 

524,469 

476,490 

298,866 

368,282 

427,000 

496,200 

443,000 

472,057 

475,000 

682,185 

650,779 

476,898 

404,379 

435,584 

498,015 

516,628 

652,575 

661,785 

859,885 

1,022,052 

968,421 

1,036,305 

1,122,033 



257,109 
751,945 
905,003 
1,327,011 
1,462,871 
1,409,356 
1,722,887 
2,304,432 
2,198,496 
793,765 
1,241,304 
2,226,768 
2,675,650 
3,372,4a5 
5,138,959 
4,350,898 
3,729,618 
3,223,661 
3,073,427 
2,898,846 
2,504,475 
2,110,133 
1,721,453 



18,738,338 51,400,532 



* 
* 



12,000 

60,000 

108,077 

264,397 

302,652 

1,103.793 

2,305,613 

2,224,550 

2,118,312 

2,434,512 

3,294,206 

4,273,314 

5,157,252 

6,281,221 

7,081,165 

7,919,779 

10,657,053 

14,130,548 

13,030,549 

14,679,672 



97,428,665 



4,900 
168,410 
2,680,961 
5,274,553 
4,830,921 
4,318,550 
4,852,431 



22,130,726 



4,000 

3,000 

1,500 

248,945 



3,670 
39,392 
29,650 
10,090 
69,090 
125,475 
126,775 
58,970 
61,350 
45,870 
27,375 
27,375 
27,375 
27,450' 



937,352 



175,000 

12,000 

13,000 

15,227 

19,858 

40,552 

99,862 

128,636 

142,857 

262,000 

325,000 

377,145 

678,572 

690,333 

303,220 

307,360 

323,600 

385,049 

470,179 

783,078 

1,245,339 

1,257,780 

1,911,569 

2,249,088 

2,677,875 

4,319,950 

7,710,315 

14,3.56,910 

24,334,481 

29,548.6;M 

34,298.041 

32,623,229 

40,102.512 

48,306,737 

58,191,723 

77,697,568 

83.744,044 

90.074,439 

97,867.184 

103.623,695 

89,5.56.779 

91,822,362 



943,082.782 



78 



REPORT OF COMMITTEE ON PETROLEUM. 






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Shell Company of California 


Miscellaneous, 
including Santa Fe 






H 


►3 





H 


»i) 


1-3 


*tJ 


3 


*ij 














































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10.7 


540 


540 


10.5 


275 


5.3 


5,130 


66.2 




""30" 










83 
65 


11.8 
4.9 


700 
1,380 


9.0 




2.3 








17.2 












81 
56 


40.5 
14.7 


200 
380 


2.7 












4.9 
















580 

"7".4%' 


\ 540 

1 






560 




7.740 


100.0 












: 7% 






7.2% 






















tate production. 




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CHAPTER V. 

STORAGE OF CALIFORNIA PETROLEUM. 

I. General Statement. 
The statistics of storage of California oil are generally known and 
have been widely discussed. The present investigation is largely due 
to the general alarm occasioned on the Pacific coast by the reported 
heavy drain on the oil storage to meet the increasing industrial demands, 
together with the fear that California might be unable to do her part in 
meeting the present war emergency through lack of fuel for the opei'a- 
tion of railroads and maintenance of manufacture. 

II. Importance ejf Storage »S7ocA'.s\. 

The importance of maintaining a supply of oil in storage can not be 
Dverestimated. The marketing companies can not sell oil on samples 
and the industries dependent upon oil can not expand unless they have 
assurance of an adequate future supply, or a suitable substitute. 

A reserve of oil is required for market control under normal conditions 
and must be maintained for safety in war times. 

III. Classification of Storage. 

The figures on storage commonly reported refer to crude oil in reser- 
i^oirs and tanks in the field, in pipe lines and pine line tankage and in 
storage at the pipe line terminals. In addition to this, there is a certain 
piantity of oil in the process of manufacture at the different refineries ; 
ilso refinery storage consisting of both residuum and the various refinery 
products. There is also a third class of storage which is in the hands 
)f the consumers, including railroad and steamship companies. 

In this report we have considered the field and pipe line storage and 
;he refinery storage as available and have not considered oil in the 
process of manufacture or in the hands of consumers, as this quantity 
)f oil must be maintained in order to continue industrial operation, 
^'or example, there is approximately 1,100,000 barrels of oil in storage 
dong the lines of the Southern Pacific and Santa Fe railroads, but as 
his is only equivalent to the oil required for twenty days' operation 
it these railroads, it is evident that these stocks can not be further 
liminished without endangering the maintenance of traffic. 

Unless otherwise specified, the term "storage" will be used in this 
'eport to represent crude oil stored in the field, along pipe lines and at 
)ipe line terminals. 



80 REPORT OF COMMITTEE ON PETROLEUM. 

IV. Bdaiiun of Siura(j( lo I'vodiiciion and Coiisuniption. 

The figures of production, of eonsuinption and of storage should be 
considered together, l^y reference to Phite XVI, it will be seen that 
whenever production of California oil rai)idly increases, the quantit\- 
of oil in storage is also increased and a rapid increase in consumption, 
due to industrial expansion on the Pacific coast, tends to deplete tli< 
stock. In other words, storaiic statistics may be considered as a recoid 
of the pulse record of tlie oil industry. Tlie waves shown in the storai!v 
curve wave plate represent, therefore, the rapid increase in production 
in 1903-19U-1 and 1909-1910 and again in 1913-1914. while the troughs 
follow the prosperous years of 1906 and 1916. This last decline in 
storage, witli which we are now concerned, was accentuated by a sharp 
decline in production following the maximum output of 1914. 

In order to bring out more clearly the relation between oil storage 
and tlie industry, Plate XVII, was plotted to show the ratio between tlic 
amount of oil in storage each month and the corresponding annual ^ 
consumption. 

From this plate it will be seen that in August, 1906, there was oil in 
storage equivalent to an eight months' supply, while in September, 1908, 
the oil stocks were only equivalent to the consumption for a period of 
three and one-half months. In December, 1912, these stocks had risen 
until they represented a supply for six months' use and, by February, 
1915, the 60,000,000 barrels in storage would have been sufficient to meet 
the demand for nearly eight months. 

The present decline in oil storage began in September, 1915, and has 
since averaged over a million barrels a month, and for the six months 
from January 1, 1917, to July 1, 1917, has averaged approximately 
1,100,000 barrels per month. The quantity in field and pipe line storage 
on July 1st was less than 37,000,000 barrels, or approximately four 
months' supply. In other words, although the actual quantity in 
storage had decreased 40 per cent, the increased demand has made the 
present supplv only equivalent to one-half the storage of September, 

I 

V. AvailahUity of Stocks. 

Another fact to consider is the amount of the oil in storage actually 
available for emergency use. The best figures and estimates the com- 
mittee has been able to gather show that approximately 6,000,000 barirls 
of the present storage would not be available. 

A quantity of oil estimated at 2,000,000 barrels is required for the 
operation of the pipe lines of the state and about 4,000,000 barrels is ii 
the bottoms of large tanks and reservoirs below' the points of outlet. 



I 




Sm ^Mb giOKMOE 



m 




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future date. 



80 



REPORT OF COMMIT 



IV. BclnlioH of storage to 

rm,,>„..A«»M Moa -<>f- .vwnn/liiaiiAn — of- MO 

< rr ) ' -4- 1 I < t t t i -»-+• I I t I ■ ' f - i— (— (— I 

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operation 



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^ 



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pipe liues Ui 



4-i 



P 

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i 

I 

i 



T! 1 I irV^ii. 



the bottoms of large tanks an 



STORAGE OF CALIFORNIA PETROLEUM. 81 

As a matter of fact, in some of the larger earthen reservoirs a consider- 
able quantity of oil has undoul)tedly seeped into the <>'ronnd and can 
never be recovered economically. 

On June 1, 1917, the committee estimated that 32,000,000 barrels of 
oil were available and each month will see this quantity rapidly decrease. 
The present rate of depletion would exhaust the available stock within 
two years and the increasing demand would tend to shorten this period. 

The committee has considered that a certain quantity of crude oil is 
recjuired in storage for the successful maintenance of the oil business 
and the industries now dependent upon oil. This safety factor we have 
estimated at 10,000,000 barrels of available oil, or a total of 16,000,000 
barrels in field and pipe line storage. This quantity is equivalent to 
only a little more than thirty days' consumption. If used, as it pre- 
sumably would be, to make good the difference between consumption 
and production, it amounts to a nine months' supply. The committee 
considers that under present conditions it would be very dangerous to 
carry on industrial operations on tlie Pacific coast on any smaller margin 
of storage oil. 

VI. (JJiaraclcr of Oil in Slormie. 

According to the figures reported by the companies having the largest 
quantity of oil in storage, the gravity of the bulk of this oil varies from 
about 14° Baume to 26° Baume, with smaller quantities of still lighter 
oil. In general, the light oils are refined as rapidly as possible to prevent 
loss of their volatile constituents. The total amount of oil in storage 
below 20° Baume, which has been nominally considered the dividing line 
between refining oil and fuel oil, was approximately 20.000,000 barrels 
on June 1. 

VII. Actual Quantity of Availahle Fuel Oil in Storage. 

If the same test of availability be applied to this heavy oil, not more 
than 17,000,000 barrels of the field and pipe line stocks can be counted 
on for use; however, at the refineries in the state, and not included in 
any of the above figures, 3,000,000 barrels of residuum are stored and 
another 7,000,000 barrels of residuum can be anticipated as one of the 
products from the refining of the light oil now in field storage. 

The total available stocks of fuel oil can, therefore, be approximately 
stated as 27,000,000 barrels. 

At the present rate of consumption of fuel oil, this is equivalent to 
less than four months' supply. 
&— 31469 



82 REPORT OF COMMITTEE ON PETROLEUM. 

VIII. Location of Oil in Storage. 
Plate XVIII shows the location of crude oil in storage in California on 
May 1, 1917. From this plate it is evident that approximately 7,000,000 
harrels of oil are now stored in tank farms on San Fi-aneisco Ba\ . 
Approximately 10,500,000 barrels of oil are in tanks in the West San 
Joacpiin fields and nearly 11.000,000 barrels are in storage in the Kern 
River field. 

On the coast, near Port San Luis, a little less than 6,000,000 barrels 
are in storage, with another 1,000,000 barrels in tnnks in Ihe Santa 
Maria field. 

In the Southern Coast and the Whittier-Fullerton fields, less than 
4,000,000 barrels of crude oil are in storage. However, the greater part 
of the residuum in refinery storage is in this southern district. 

As shown in Chapter VI, the oil in storage in southern California and 
in the Central Coast district is not as readily available as the oil on 
San Francisco Bay or in the San Joaquin Valley, owing to the lack oF 
transportation facilities. 

IX. Conslnicllon, Cost and (\ii>arihj of Slorafje. 
The storage usually ouiployed in Califoi-nia is of five different typt's: 
First — Covered steel tanks ; 
Second — Covered reenforced concrete tanks; 
Third — Covered concrete lined reservoirs; 
Fourth — Covered clay reservoirs; and 
Fifth — Open earth reservoirs or sumps. 

The steel tanks in common use for the storage of oil in large volumes 
usually have a capacity of 55,000 barrels, although some storage tank> 
of smaller size, with a capacity of approximately 37,000 barrels, are used. 
These tanks are used along the pipe lines at the pumping stations. 

Based on the cost of materials in 1911, the cost of steel storage tanks 
is approximately as follows: 

37,000-barrel capacity ^]^'^ ^ 

r,5,0(X)^barrel capacity l*^'^^ ^ 

This is equal to 24 to 27 cents per barrel of capacity. 

The reenforced concrete tanks have been built in all sizes up t( 
1,000,000-barrel capacity. These large sizes have not proved economical 
or successful, while the concrete lined reservoirs with wooden roof, of 
with concrete roof, have been very successful. 

The capacity of these reservoirs varies between 500,000 and 750,000 
barrels. The various types of the concrete tanks are used at the gather- 
ing stations and at the terminal stations of the pipe lines. 






/ 



/ 



^ • 



/ 



t 

/ 



/ 



/ 



9 

/ 



/ 



Tm\ 










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future date. 



82 



REPORT OP COMMITTEE ON PE' 




STORAGE OF CALIFORNIA PETROLEUM. 



83 



One of the large companies has a great part of its storage of heavy 
oil in covered clay reservoirs with capacity between 500,000 and 750,000 
barrels. These reservoirs are unlined, but are covered with a wooden 
roof. Their cost is about 8 cents per barrel of capacity. 

The open sumps are used mostly for emergency storage in the case of 
a sudden gusher, or for the settling of sand from the oil. Undoubtedly 
there has been a great deal of loss due to seepage and the evaporation 
of oil from these open sumps. 

The losses due to leakage and evaporation in steel or concrete tanks 
has been estimated at less than one-half of 1 per cent per year. The 
loss in the unlined earthen reservoirs may vary from 2 to 5 per cent 
per year, depending upon the class of material used in the construction 
of the embankment. The higher figure as to loss occurs in cases where 
suitable impervious clay has not been used in lining the reservoir. 

X. Owniership of Storage. 
Tlie ownership of field storage, and of the oil in storage, is shown in 
Table 9. From this table it is evident that the Standard and Union 
Oil companies together own approximately 85 per cent of the oil in 
storage in California at the present time. 



TABLE 9. 

Storage Facilities and Stocks of Crude Oil in California, May 1, 1911. 

(Barrels.) 





San Joaauin Valley 
District 


Coast and Southern 
District 




Storage 
facilities 


OUln 

storage 


Storage 

facilities 


OUln 

storage 


Associated Oil Co _. _ _ 


11,040,000 


1 7Ponnn 


780,000 

*l,10O,0OO 


260,000 
920 000 


General Petroleum Co. 


*900,000 1 '766;0OO 
4,130,000 t 550,000 
2,290,000 ! 1,430,000 
39,200,000 i 19,510,000 
5,010,000 4.^90.000 


K T. & 0. Co 




Shell Co. of California 






Standard Oil Co 


3,160,000 
10,100,000 


2,170.000 

6,360,000 

840,000 


Union-Agency __ 


Miscellaneous 




200,000 








Totals .. _. 


62,570,000 


28,830,000 


15,140,000 
62,570,000 


10,050,000 
28,830,000 




Grand totals 


77,710,000 


38,880,000 











•Estimated. 





• 


Terminal 


Description 


;ation 


Branch line to Trunk Line No. 4. 




Trunk Line No. 1 to coast. 


)sta 


Trunk Line No. 2 to San Francisco Bay. 


Iro 


Trunk Line No. 3 to San Pedro. 


Station 


Branch line connecting with Midway branch. 
Trunk Line No. 1. 


osta 


Trunk Line No. 2. 


Itatlon 

>s 


Branch line to Trunk Line No. 4. 
Branch line to Trunk Line No. 2. 


n 


Branch line to Trunk Line No. 3. 
Branch line to Trunk Line No. 1. 


Qd Refinery ... 
•ick 


Trunk Line No. 4. 

Branch line to Trunk line No. 1 


psta 


Trunk Line No. 5 to San Francisco Bay. 
Branch line to Trunk Line No. 4 


a - 


n 


Branch line to Trunk Line No. 1. 


3sta 


Trunk Line No. 2. 


;y 


Trunk Line No. 6. 


iZ 


Trunk Line No. 7. 


in Luis. 

in Luis. 

I. 

via Refinery. 

via Refinery. 

I. 

I. 

; Station 

geles. 
geles. 

ndo. 

Iro. 

1 * 


Connecting with Whittier-Fullerton Line. 

***** 
From Trunk Line No. 3 (distribution). 


fton 


General Petroleum Refinery (distribution). 











V 



f. 





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CHAPTER VI. 

TRANSPORTATION OF CALIFORNIA PETROLEUM. 

I. ] ittpoyfniicr of Tnnispoffadon. 
1. Value Dependent on Availability, 

The transportation of oil has always been a controlling' factor in the 
industry. This applies to both the transportation of crude oil from the 
wells to the refineries and the distributing points ; and also the distribu- 
tion of the refined products and residuum from the refineries and the 
distribution of crude oil sold directly. The value of oil, or any product 
thereof, depends on its availability. 

As pointed out in Chapter II, the Allies are not able, at the present 
1^, •^o take full advantage of their control of the oil fields of the world. 
The present difficulty of ocean transportation makes this an extreme 
case, but it illustrates the necessity of an adequate method of delivering 
oil to the point of use. As another example, the impending shortage of 
oil in the United States could easily be met if facilities were available 
for bringing larger quantities of Mexican oil to this country. 

The reports of the Federal Trade Commission on pipe line trans- 
portation (191-i) and on the price of gasoline (1916) show that the 
control of the development and production of the oil fields of this 
country rest largely with the pipe line companies. 

2. Necessity of Pipe Lines in California. 

The development of the oil industry in California shows a similar 
history, since the control and disi)osition of the oil produced has been 
almost entirely with the marketing companies owning pipe lines froiii 
the fields. At the present time, all the important fields in California 
and pi'actically all the wells are connected with pipe line systems. How- 
ever, it is unfortunately true that the most productive fields are rela- 
tively inaccessible and that rather long lines of pipe are required to 
bring the oil to tidewater for refining and shipment. 

The facilities for transporting the oil from the various fields of the 
state, together with the ownership of these lines, are shown in Table 10 
and in Plates VI and XIX. In the latter the approximate route fol- 
lowed by the pipe lines fi'om the field to the point of delivery is shown, 
while in Table 11 the transfer of oil from one company to another and 
the destination of the oil from each field are indicated. The location of 
pipe lines is naturally controlled by the position of the terminals and 
the topography of the intervening region. 



86 REPORT OF COMMITTEE ON PETROLEUM. 

II. Control of Pipe Lines. 

The companies controlling pipe lines in the state of California are as 
follows : 

Standard Oil Company of California, which operates two 8-inch lines, 
with 12-inch loop from Bakersfield to San Francisco Bay, with connect- 
ing branches from ]\Iidway, Lost Hills and Coalinga. This company 
also operates two pipe lines from the Whittier-Fiillerton district to the 
El Segundo refinery ; one from El Segundo to San Pedro Harbor, and 
small pipe lines from the Southern Coast fields to Ventura. 

In the Central Coast district, the Standard Oil Company owns one 
line to Port San Luis, which is idle at the present time. 

The Union Oil Company owns lines from the Whittier-Fullerton and 
Southern Coast fields to Los Angeles and San Pedro ; from the Central 
Coast to Port San Luis and, through the OAvnership of stock of the Pjo- 
ducers Transportation Company, controls pipe lines from the I >uj 
Joaquin fields to Port San Luis and has recently acquired, through t^,, 
purchase of the Pinal Dome Oil Company, two small lines from 'hi 
Santa Maria field. 

The Associated Pipe Line Company is owned jointly by the A.- 
ciated Oil Company and the Southern Pacific Railroad Company. This 
company operates 8-inch pipe lines from the San Joaquin Valley fields 
to Port Costa, on San Francisco Bay and the Associated Oil Company 
also owns a 6-inch pipe line from Coalinga to Monterey Bay; an 8-inch 
line from the Central Coast fields to the refinery at Gaviota, and one 
from the Southern Coast district to Los Angeles. 

The General Pipe Line Company, which is a subsidiary of the General 
Petroleum Corporation, owns and operates the only pipe line which 
transports oil from the West San Joaquin fields south to Los Angeles 
and San Pedro. This company also owns a branch line, which, delivers 
oil to Mojave on the Santa Fe Railway. 

The Valley Pipe Line Company, wliich is a sul)sidiary of the Shell 
Company of California, owns and operates a coml)ination 8-inch and 
10-iuch line from the Coalinga disti-ict to tlieir Martinez refinery. 

111. Pipe L'dus Prom Calif (irnia PicUh. 

By reference to tlie i)lates it may be seen that the oil produced in the 
San Joaquin Valley may be delivered north to San Francisco Bay 
through any one of three different systems ; west, to tidewater ; through 
either of two lines, one delivering to :\Ionterey and one to Port San Luis ; 
or south, to Los Angeles and San Pedro through one pipe line. From 
the Whittier-Fullerton field there are two systems of pipe lines to Los 
Angeles and to tidewater, and the problem of transportation from this 
inqtortant district is not the question of movement from the fields, but 



87 

elds in the 
road. The 
: oil to tide- 
There are, 
1 Francisco 
i all of the 
on steamer 
rs. 

since addi- 
ield can not 
rnia or the 
?, which are 
to meet the 



for the suc- 
f pipe lines 



varies from 
per foot, is 
e-inch pipe 
) reduce the 
3n or longer 
ig as nearly 
throughout 
328 barrels 



:y-five miles 
miform and 
possible are 

ters, boilers, 
crew. The 
at pumping 
,000 barrels. 
I the system 
3se are built 
:'rels. 

horsepower 
or pumping 
nps must be 




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TRANSPORTATION OP CALIFORNIA PETROLEUM, 87 

of delivery to the point of use. Nearly all of the small fields in the 
Southern Coast district are served by both pipe line and railroad. The 
Central Coast district has three short lines for the delivery of oil to tide- 
water at either Gaviota (Alcatraz) or at Port San Luis. There are, 
however, no pipe line facilities for the delivery of oil to San Francisco 
Bay from any district outside the San Joaquin Valley, and all of the 
Southern and Coast districts are therefore dependent upon steamer 
transportation to carry oil to the principal marketing centers. 

This fact is of great importance in the present emergency, since addi- 
ti;:nal oil developed and produced in the Whittier-Fullerton field can not 
readily be used to relieve the shortage in northern California or the 
Puget Sound district ; for this reason, the San Joaquin fields, which are 
the most distant from marketing centers, are called upon to meet the 
greater part of the increased demand. 

IV. Details of Pipe Lines. 

In oi'der to get a view of the amount of capital recpured for the suc- 
cessful operation of tlie oil business, the following details of pipe lines 
are supplied: 

1. Line. 
The diameter of the main pipe lines as shown in Table 10 varies from 
.six to twelve inches. The 8-inch pipe, weighing 28 pounds per foot, is 
chiefly used in California for trunk lines, ten and twelve-inch pipe 
sometimes being used either singly or in multiple in order to reduce the 
friction and overcome the increased resistance due to elevation or longer 
distances between stations, all with the object of maintaining as nearly 
as may be a uniform working pressure at the various stations throughout 
the system. The cubic capacity of an 8-inch line is about 328 barrels 
per mile. 

2. Pumping Stations. 

The pujiiping stations, usually from fourteen to twenty-five miles 
apart, are so located as to insure, as nearly as practical, a uniform and 
economic pumping pressure throughout the system, and if possible are 
situated near good water supply. 

These pumping stations consist of storage tanks, oil heaters, boilers, 
pumps, and the necessary buildings for equipment and crew. The 
storage tanks in common use in California for storing oil at pumping 
stations are made of steel with a capacity of 37,500 or 55,000 barrels. 
At the initial or gathering stations and at the terminals of the system 
covered reinforced concrete reservoirs are often used. These are built 
with a capacity varying between 500,000' and 1,000,000 barrels. 

Pump stations frequently have as much as 1,000 boiler horsepower 
for the operation of either direct-acting duplex pumps or pumping 
engines with crank and fly wheels. The design of the" pumps must be 



88 REPORT OF COMMITTEE ON PETROLEUM. 

such as to qualify them with a steam pressure of 135 pounds per square 
inch for effective service against pumping resistance of 600 or more 
pounds per square inch. 

3. Cost of Pipe Lines. 

The cost of pipe lines in California is much higher than similar lines 
constructed in the eastern oil fields: 

Fi^st — Because the oil pumped is heavier and a greater number of 
pumping stations are required; 

Second — On account of the freight charges on steel pipe and other 
materials. 

In California, the cost of an 8-inch pipe line complete, with stations, 
on the basis of the cost of materials in 1914, was in the neighborhood of 
$20,000 per mile, the cost of the 8-inch pipe in the ground being about 
35 or 40 per cent of the total. At the present time, the price of the 
pipe is more than double that of 1914 and the cost of material and 
labor has also increased. 

Reference to Table 10 shows that there is a little over 2,000 miles of 
main trunk pipe line in the state of California. 

V. Operaiion of ripe Lines. 

1. Statement of Problem. 

A factor of great importance in the transportation of California oil is 
its physical character as regards gravity and viscosity, since the prin- 
cipal resistance to pipe line transportation is the viscosity of the oil. 
The chief measure employed to reduce or control the influence of this 
factor is the heating of the oil. In the Eastern oil fields, where oil is 
relatively light, it is pumped generally at atmospheric temperature, 
while in California, where a great part of the oil is below 18° Baume 
0.9459 sp. gr., it is heated to a temperature between 125° and 170° F. 
at each pumping station. Higher temperatures cause gasification which 
makes pumping difficult. At a low temperature the viscosity decreases 
at first rapidly with rise of temperature and then more and more slowly. 
The heavier and more viscous grades have to be heated to higher temper- 
atures than the lighter ones, and a point is reached when the pumping 
of the oil (somewhat below 15° Baume 0.9655 sp. gr.) in this manner 
is very expensive. 

2. Operation of Pipe Lines. 

In California practice, the oil from the well is usually discharged 
with a considerable amount of sand and often with a large amount of 
water. In order to get as clean oil a»s possible, the well delivery is made 
into a separating tank, from which the oil is pumped into the producer's 
shipping tank, where it is measured by the pipe line company and then 
allowed to flow by gravity, or, if necessary, pumped to the storage tank 



TRANSPORTATION OF CALIFORNIA PETROLEUM. 89 

at the pipe line gathering station. The oil is then pumped to the receiv- 
ing tank of the nearest main line jnimping station, and thence through 
the pipe line system to the terminal. 

3. Method of Operation of Hot-Oil Lines. 

For the purpose of transportation, the California pipe line companies 
classify the oil into fuel oil and light refining oil. The dividing point 
of these two grades is placed by the Standard Oil Company at 18° 
Baume (0.9459 sp. gr.) and by the Associated Oil Company at 22^ 
Baume (0.9210 sp. gr.). The oil is stored separately according to 
gravities and the minimum runs of one grade are kept as high as 
possible and seldom fall below 100,000 barrels. 

As examples of the difficulty of transportation of heavy oil, many of 
the companies run the low gravity oil below 18° Baume (0.9459 sp. gr.) 
as infrequently as possible and in as large a run as can be obtained, 
never less than 100,000 barrels, usually between 250,000 and 500,000 
upward to several million barrels. Oil under 15° Baume (0.9655 sp. gr.) 
can not be readily pumped through small pipes on account of the rapid 
cooling of the line. The oil produced in the Casmalia field in the Central 
Coast district must be mixed with light oil, or heated by auxiliary steam 
pipe, or even specially treated by cracking, before shipment through 
the pipe lines. 

In order to operate to its highest efficiency, one of the companies 
operates its " hot-line " to transport oil under 22° Baume (0.9210 sp. gr.) 
for twenty days, and oil lighter than this for the remaining ten days of 
every month. The light oil is run preferably during cold or wet weather, 
the heavier product being pumped during the summer months. It is 
claimed that during the first winter of the operation of the Producers 
Transportation pipe line its daily capacity was reduced from about 
25,000 to about 3,600 barrels per day because the line had to be operated 
continuously with heavy oil. One of the pij)e lines from Salt Lake 
field to Los Angeles has pumped as high as 18,000 barrels of light oil 
per day in hot weather, but on cold days the average of fuel oil has 
fallen as low as 800 barrels. 

The different qualities of oil are pumped successively, and although 
a certain amount of mixture of oils of different gravities takes place 
particularly at the pumping stations, the main bulk of the run retains 
its identity. At the terminal of the pipe line a careful check is kept 
on the rate of pumping and amount delivered so that the end of a run 
is known ahead of time and the flow of oil of different gravity is diverted 
to another tank. 

4, Working Capacity of Pipe Lines. 

The capacity of pipe lines of given diameter varies with the workino- 
pressure, the viscosity of oil (which in turn varies with its composition 
and temperature), climatic conditions (temperature, rainfall), distance 



90 



REPORT OF COMMITTEE ON PETROLEUM. 



between stations, available storage capacity, and the topography of the 
region traversed by the line. Roughly speaking, the capacity of pipe 
lines increases with the size in about the ratio of the square root of the 
fifth power of the diameter. The capacity increases faster than the 
square of the diameter as the friction decreases with the increase in size. 
This, however, is somewhat offset by the fact that with smaller pipes a 
higher working pressure can be used. Thus, the capacity of a 6-inch 
line, operating with 800 to 900 pounds pressure, is between 12,000 and 
17,000 barrels a day, and that of an 8-inch, working under a pressure 
of 700 to 750 pounds, from 20,000 to 25,000 barrels. The average 
spacing of the stations in each case will be about 14 miles. In Cali- 
fornia an 8-inch hot-line with adequate pumping equipment will handle 
between 20,000 and 30,000 barrels of 16° Baume oil per day. 

5. Present Situation in Pipe Line Transportation. 

The estimated capacity of the pipe lines serving the different districts 
of the state for the average gravity of oil transported is shown in 
Table 12, which also shows the average quantity shipped through these 
lines for the first four months of 1917. 

From this table, it will appear that there are adequate pipe line 
facilitias for transporting oil from the fields and for taking care of an 
increase in production. 

TABLE 12. 

Pipe Line Transportation of California Oil. 
(All figures in terms of thousands of barrels per month.) 



Point of delivei-y 



Capacity 


Average 


of all lines 


shipments 


4,500 


4.000 


450 


200 


1,500 


1,100 


800 


740 


1,350 


1,230 


300 


100 


1,650 


360 



San Joaquin 

Whittier-Fullerton 
Southern Coast _.. 
Central Coast — 



San Francisco Bay 

Monterey 

Port San Luis 

Vernon, Mojave 

Los Angeles, San Pedro 
Los Angeles, San Pedro 
San Luis, Gaviota 



6. Tank Car Shipments. 

In Table 11 the operations of the pipe lines of the state are indicated 
for the single month. The figures in this table are averaged from the 
first four months of 1917, but represent fairly well the actual working 
conditions at any given date in this period. By reference to this table 
it will be seen that a little more than 10 per cent of the total shipments 
from the fields are handled by tank cars. These tank car sliipments 
represent, in large part, very heavy oil below 15° Baume and, in part, 
is lighter oil. 



TRANSPORTATION OF CALIFORNIA PETROLEUM. 91 

Some of these tank cars deliver their oil along the railroad lines for 
locomotive use, while some of them are sent direct to the mines and 
smelters of Arizona and Nevada. 

VI. Possible Coordination of Industry. 

At the present time there is a great .shortage of tank cars and tank 
steamers and it appears to the committee that a considerable saving 
could be made by the complete coordination of the oil industry in the 
matter of transportation. To some extent the marketing companies 
are now cooperating in order to facilitate delivery and to arrange for 
exchange of oil. This is shown in Table 11. 

For example, the Southern Pacific Company trades its light oil, 
s-'-'i*"^^" for easy refining, for heavy oil below 21° Baume, and other 
'•oi , es transfer a part of their oil, using various bases of exchange. 

I ; ^e extent, the General Pipe Line Company acts as a transporta- 
tion .igi nt for the southern divisions of the Santa Fe and Southern 
Pacific "ailroads. However, this cooperation is not as complete as it 
night be. 

Oil travels in opposite directions in parellcl pipe lines and nuich of 
.<! o^l from the San Joaquin fields takes a roundabout route to reach 
'■ laFjascisco Bay. 

"' > shipped through a pipe line south from the AVcst San Joaquin 

■! • Los Angeles, and oil produced in Southern California is shipped 
'<:>!: iin Pedro north by vessel. 

Oil tor Arizona may go from Casmalia, McKittrick or Coalinga field 

! en chere is relatively a surplus of oil in southern California, whence 

I could be shipped with a shorter haul to partially relieve the shortage 

tank cars. 

Oil is shipped by steamer from San Pedro to Puget Sound and from 

m Fr;incisco to South America, so that steamer routes cross each 
: her. 

In 111'} matter of tank cars, it is worthy of note that one of the 
uirkotiug companies reports that they are behind in their orders for 
elivery of fuel oil to the extent of 5,000 cars, although they have ample 
'<'A(]\v.i facilities at their refineries. 

One of the reasons for the long distance shipments made in tank cars 
lies in the fact that under the existing freight tariff's the rate charged 
on oil shipments to terminals outside of the state is the same from all 
terminal points in the state. From a monetary standpoint there may 
be no advantage, therefore, in shipping from the nearest field to the 
point of delivery, but an economy in the use of tank ears could be efi'ected 
by such a practice. 



92 



REPORT OF COMMITTEE ON PETROLEUM. 



VII. Distribution of Oil. 

Ill general, the conditions in regard to distribution of oil to the point 
of use are unsatisfactory. This problem is much more complicated 
than the transportation of oil from the field and greatly increased tank 
car and tank steamer facilities are required to handle California oil and 
its products over the area now dependent upon this state for its oil 
supply. 

Table 13 shows the number of tank cars now used in the distribution 
of California oil, and the number and total capacity of the tank steamer.^ 
now operating on the Pacific coast. In Plate XIX these steamer routes 
are indicated. 

The capacity of the tank cars varies from 200 to about 300 barrels, 
and the average daily movement of these cars is probably not more than 
50 miles per day. The Southern Pacific Railroad reports a movement 
of 75 miles per day in handling their own oil for their own use. but this 
traffic is organized and expedited in every way. 

TABLE 13. 

Tank Cars and Stcamshipn Oicncd {or Chartered } hi/ Ruihoad and Oil Conipanii s 

of California. 



Company 



Tank cars" 



Capaclty, 
barrels 



'Steamships 



General Petroleum Company- 
Associated Oil Company 

Shell Company of California- 
Standard Oil Company 

Union-Agoncy 



Totals— oil companios- 



Northwestern Pacific 

Salt Lake 

Atchison, Topeka and Santa Fe- 

Southern Pacific 

Western Pacific 



Totals— railroads 
Grand totals 



28 
342 

53 
925 
132 



1,480 



211 

800 

2.572 

169 



3,752 



5,232 



6.264 

89.880 

14.980 

260,000 

28,579 



*399,703 



61.000 
190.500 
612.000 

40.300 



903.800 



*1,303.503 



• 3 

5 
3 

17 
15 



43 



43 



Capacity, 
barrels 



487 
230,655 
145,500 
518.033 
883.352 



1,778,027 



1,778,027 



►Estimated. 



On the basis of this movement, and the number of cars now in use 
(5,232), it will be seen at once that a greatly increased number would 
be required to afford any material relief to the car shortage. In this 
connection it must also be borne in mind that the present shortage of 
steel makes the construction of any large number of- tank cars very 
difificult, and also that iiicrea.scd tank car shipments would require an 



TRANSPORTATION OF CALIFORNIA PETROLEUM. 93 

increased number of locomotives, and would result in increased con- 
sumption of oil. At this time for reasons brought out in Chapter VIII, 
it is important not to increase the amount of railroad traffic, but to 
reduce it in every possible way. 

The tank steamers have a capacity ranging from 10,000 to 65,000 
barrels per month and have an average monthly mileage of from 5,000 
to 6,000 miles. 

Some additional steamers are under eonstruction at the present time, 
but the United States Government and the British Government have 
already taken several tankers from the Pacific coast, and the National 
Council of Defense has asked the California oil companies to release 
every possible steamer for Atlantic service. No material relief can, 
therefore, be anticipated from this new construction during the period 
of the war. 

VIII. ISionmarij. 

The principal facts in regard to the transportation of the California 
oil to which the committee would direct attention are : 

First — That pipe lines are necessary for the transportation of Cali- 
fornia oil and that the control of a large quantity of oil is required 
before the expense of the installation of a pipe line is justified. 

Second — That the present pipe lines of the state have ample capacity 
to transport oil now produced in th'e field and to care for a material 
increase in this production. 

Third — That transportation facilities for the delivery of oil produced 
in southern California to northern markets are at present inadequate. 

Fourth — That there is a great shortage in tank cars and tank steamers 
which greatly hampers the delivery of California oil and its products 
to the point of use, and no material relief can be anticipated from new 
construction during the period of the war. 

Fifth — That some saving could be made by complete coordination of 
the oil industry as regards transportation. 




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CHAPTER VII. 

REFINING OF CALIFORNIA OIL. 

I. Scope of Investigation. 
It is not within the scope of the present investigation to attemi)t a 
complete report on the refining of California petroleum. The subject 
of refining is too complex to be adequately discussed without a special 
study, and would then require a full treatise for comprehensive treat- 
ment. 

The recent publications which cover, in part, the refining of Cali- 
fornia petroleum are: 

American Petroleum Industry, Bacon and liamor, 191G. 
Bureau of Mines Bulletin, 114. 

Manufacture of Gasoline and Benzene-Toluene from Petroleum 
and Other Hydrocarbons, W. F. Rittman, C. B. Button and 
E. W. Dean, 1916. 

In order to cover the present status of the oil industry in Californi.i, 
the committee investigated the present capacity of the California 
refineries, together with their present output, and their plans for 
future development. 

II. Composition and Character of California Oil. 
Crude petroleum is a mixture of hydrocarbons in variable proportions 
with small quantities of oxygen, nitrogen and sulphur present as 
impurities. California oil is also mixed with small quantities of water 
and base sediment. In the Eastern oil fields of the United States, the oil 
has a paraffin base, and usually contains 66 per cent, or more, of 
hydrocarbons of methane (marsh gas) series. In California nearly all 
the oil is asphaltic, sometimes containing more than 50 per cent of 
hydrocarbons belonging to the naphthene series, and also contain large 
proportions of the hydrocarbons usuallj' found in coal tar, known as 
the aromatic of benzole series. 

III. Basis of Refining Methods and Classification of Products. 

1. Properties of California Oil. 

The average properties of oils from the different California fields are 

shown in Table 18. The separation of the hydrocarbons in crude oil 

may be accomplished by distillation, since these hydrocarbons have 

varying boiling points. 



96 REPORT OP COMMITTEE ON PETROLEUM. 

Bulletin 114 of the United States Bureau of Mines, referred to above 
states : 

"Each of the hydrocarbons of high boiling point contained in 
such mixtures is, during the process of distillation, exposed to 
various degrees of temperature below its own boiling point, so 
long as the hydrocarbons of lighter gravity and boiling point are 
not removed from the still. Consequently, the liquid hydrocarbons 
of high boiling point may remain exposed in the still to tempera- 
tures below their boiling point for a number of hours." 

2. Basis of Separation. 

While separation of oils into their constituent hydrocarbons -is, there- 
fore, possible, it is never carried out in actual manufacturing, and the 
oil is separated merely into such portions as will best fill the require- 
ments of trade. These requirements are largely dependent upon the 
boiling point, or volatility of the products, so that separation l)y dis- 
tillation supplies a double purpose. 

The lighter products, which are easily vaporized, and which form, 
with air, an explosive mixture, are used for internal combustion engines, 

The next group is more difficult to vaporize, is distilled at a higher 
temperature, and. therefore, forms an illumiiuiting oil which may b< 
safely burned in lamps. 

Another class, which may be vaporized with still greater difficulty 
forms suitable lubricants. It is evident, from the above outline, thai 
each one of these classes is better l)y being separated from the others 

3. Classification of Refineries. 

The principal refineries of California now in operation are shown ir 
Table 14. They represent a total investment of approximately 
$20,000,000.00. These refineries may be roughly considered under 
three heads : First, refineries which carry the treatment of a part oi 
the crude oil to complete distillation, and, as a result of this fractiona- 
tion, obtain a full series of refined products. Second, the so-calleci 
topping plants treat the lighter grades of crude oil with the object ol 
obtaining gasoline and a high grade of distillate, and, incidentally, a 
large quantity of fuel oil. Third, plants, which treat the heavier grades 
of crude oil, in order to pr'oduce road oil and asphalt. 

In addition to these three classes of oil refineries, there are alsc 
easinghead gasoline plants, which recover high-gravity gasoline suitabk 
for blending with distillate. These ar-e listed in Table 17, and will be 
separately considered. 



97 



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96 




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REFINING OF CAI.IFORNIA OIL. 97 

4. Principal Products of California Refineries. 

Tlie products inainifactnred from California petroleum by the first 
class of refineries, may be grouped as follows : 

Gasoline, now averaging about 57° Baume. 

No. 1 Tops, which include gasoline stock, and may be anywhere 
from 50° to 56° Baume. 

Engine distillate, with a gravity of from 44° to 50°. 

The distillates lighter than 44° Baume are sometimes known in 
the industry as water-white distillate. 

Kerosene stock, which is amber in color, and has a gravity of from 
40° to 42° Baume and requires further refining before market- 
able kerosene can be produced. 

Gas oil, dark in color, 34° to 40° Baume. 

Stove distillate, which is also dark in color, and of 30° to 36° 
Baume. 

Diesel fuel oil, usually 26° to 30° Baume. 

Fuel oil, or residuum, usually of a gravity of 15° to 20° Baume. 

In addition to these, lubi'icant stocks may be produced of all gravities 
from the light spindle oils, gravity 24° Baume, down to the heayier 
engine oils, to cylinder oil, gravity 15° Baume. 

IV. Developme)it of lie fining Process. 

In the first development of refining of California oil, it was found 
that the comparatively large proportion of carbon to hydrogen present 
in the benzole series produced a refined oil which burned with a smoky 
flame in the lamps manufactured for burning Eastern oils. For this 
reason, and on account of the low gravity of the oil produced from 
the first fields discovered in California, California oils came to be used 
as a series of heating and povyer, rather than as a series of lighting. 
Later, it ^yas found that the aromatic hydrocarbons could be removed 
from the lamp oil if these were distillates refined with fuming sulphuric 
acid. 

The gasoline pi'oduced in the manufacture of kerosene was at first 
considered as a by-product. With the rapid increase in the use of 
automobiles, however, gasoline has come to be the most important refined 
product, and the increased capacity of the refineries to meet the demand 
for gasoline has resulted in an increased amount of other distillates, 
including kerosene, and one of the problems of the refining and mar- 
keting companies has been to develop suitable markets for this increased 
quantity of illuminating oil. 

At the present time, the demand for lubricating oil is not great 
enough to warrant the manufacture of the maximum quantity possible, 
and the greater proportion of what, in the complete fractionation, would 
be lubricating stock, is now thrown into fuel oil and is burned under 
boilers. 

7—31469 



98 



REPORT OP COMMITTEE ON PETROLEUM. 






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REFINING OF CALIFORNIA OIL. 99 

In the topping plants, where the products obtained are distillates and 
fuel oil, the distillation is carried to a point where the distillates are 
passed through a eonipressor, wliieli indicates by its gravity tliat the oil 
remaining in the still will liave a liash-point of about 150° F. 

The fuel oil remaining can ])e stored with safety, and is pumped 
tlirough a cooler into the proper tanks for distribution to points of use. 

The refineries of the state have improved their methods, as a result of 
('xp(MMment, until greatly increased yields of gasoline and lul)rieants are 
now obtained from the oil treated. 

V. I)< tail (if /'r(S( III h'cfiiK rij I'ntcluf. 

1. Input. 

Table 15 shows the input into the Califoi'nia refineries in 191G and 
llie first four months of 1917, while Tal)le Hi shows the present total 
monthly outpnt from these refineries. 

TABLE 16. 

California Refinery Output. 
(Average monthly barrels of 42 gallons. January-May, 1917.) 

( iiiMolcnc, over .")(i° Kauiiie 430,000 

Distillates. .3G°-.")2° liaume 410,000 

Kerosene, 42° Baume 310,000 

Lubricants 105.000 

Asphalt and road oil 115,000 

Total of refined products 1,370.000 

TTnaccounted for 30,000 

Residuum 4.000.000 

Used in refining (residuum) 230,000 

Total refinery input 5,030,000 

At the present time, ai)proximately 60 per cent of the California oil 
is subjected to some degree of refining before being utilized, and it is 
evident from the statistics in the -tables cited above and in Chapter IV 
that practically all the oil over 20° Baume, now produced in this state, 
is at least partially refined, and that the production of gasoline of 
the present gravity (57° Baume) from California oil has almost 
reached a maximum, if only the past method of refining be considered. 
Plate XXI shows in outline the general treatment of California oil. 

2. Separation of Water. 
If the water which is produced with the oil is in a free state, it can 
be partially separated by settling, except in cases as in the Casmalia 
Field, where the oil is too heavy for such gravity separation. In many 
cases, however, the water produced with the oil is in the form of an 
emulsion, and then requires special treatment. Four systems have 
l)een used for this purpose : 



100 REPORT OF COMMITTEE ON PETROLEUM. 

First : Deliydratiou by direct heat. In this process the oil eiuiilsiou 
is pumped throuiih coils of pipes mounted in a brick chamber between 
brick furnaces. The temperature of the oil is raised above the hoiliim 
point of Avater, when an explosive action takes place separatinir the 
globules of water from the enveloping tilm of oil. 

Second : Dehydration by indirect heat. In this case the emulsion is 
treated by steam coils to a temperature of near 200° F., when the oil 
rises to the top of the water. 

Third: Dehydration by compressed air. Air pressure, sufficient (o 
overcome the weight of the petroleum, is heated to a high temperature 
in a boiler furnace, and is then distributed through small openings into 
the oil tank. The heat in the air is snflficient to convert the water into 
steam, and thus liberate the oil. 

Fourth: The Cottrell process, which depends upon tlie static dis- 
charge when a high voltage current is passed through tlie oil. 

3. Distillation of Oil. 

Following the dehydration of the oil, it is treated in stills of various 
types. The type in common use consists of horizontal steel shells up to 
1,000 barrel capacity set in brickwork and heated by oil or gas burners, 
the arrangement being somewhat similar to the ordinary oil-tired boiler. 
From the still the vapor is conducted through pipes to the condenser, 
which usualh' consists of a coil of pipes set in a circulating current of 
water. From the condenser the liquid distillate is conducted to the 
''tailhouse, " where gravity samples of the distillate may be taken, and 
from there it is distributed for further treatment. 

There are two methods of operating the stills. The first is known 
as the intermittent, and the second as the continuous system. 

In the tirst method, a charge of crude oil is placed in the still, and 
the temperature is increased and the distillation continued until the 
process has reached the desired point. The residuum is then withdrawn 
and a fresh charge of oil delivered. If the distillation is carried to 
completion, asphalt or coke will be the final product. 

In the continuous system, several stills are connected and run in series 
by charging the first still slowly and pinnping from the last one. Each 
still is heated to a higher temperature than the preceding one, so that 
different boiling-point fractions are obtained from each still in the 
battery. 

The Trumble plants, so called from the inventor of the process, are 
operated by the continuous system, but small pipe retorts are used 
instead of the larger stills used in the intermittent process. 

The special features of the Trumble process are the attempt to save 
lieat and the small furnaces required. The oil is heated in passing 
tln-ough twelve-inch pipe coils about twelve feet long, placed in a 



REPINING OF CAIilPORNIA OIL. 101 

longitudinal brick furnace. The heated oil then passes to the top of the 
evaporating chamber, where it is forced, by means of conical spreaders, 
to flow down the inside surface of the still shell, which is heated on the 
outside by escaping flue gas. The gas and residuum produced in this 
chamber then flow through separate pipes placed within larger ones, 
and the oil, which is to be treated in the retort, flows in the annular 
space between these pipes, so that the incoming oil is heated, while the 
outgoing products are proportionally cooled. 

4. Further Treatment of Distillates. 

In all refineries the distillates, as they come from the different types 
of condensers and are separated in the "tailhouse," require further 
refining. 

The gasoline stock is pumped into a cylindrical still provided with a 
perforated steam coil placed a few inches from the bottom of the still. 
The heat required for re-evaporation is introduced and controlled 
through the steam, and, by this means, destructive distillation, or 
cracking of this distillate, is prevented. The gravity of gasoline pro- 
duced in California has steadily decreased in the last ten years from 
72° Baume to approximately 57° Baume. It is now recognized that 
gravity of gasoline is not as important in determining its value as tlie 
control of the boiling point. 

Large quantities of gasoline are made from the distillate produced 
in the "topping plants." Many of the heavy crude oils produced in 
California contain a small proportion of light gravity oil, which may 
be easily removed in a battery of continuous stills. These "tops," as 
the light distillate is known, are usually about 50° Baume, and may be 
further refined to produce gasoline and gas oil for the manufacture of 
artificial gas, or they may be blended with high gravity casinghead 
gasoline. 

The kerosene stock is further refined by using a low fire under an 
ordinary cylindrical still, while the temperature is controlled by intro- 
ducing live steam into the still. The kerosene is then treated with about 
24 per cent fuming sulphuric acid, is thoroughly agitated with air, the 
resulting .sludge drawn from the agitator, and the kerosene washed with 
water, the acid remaining in the oil is neutralized in a solution of caustic 
soda. The desired flash test is secured by careful distillation and the 
removal of oil lighter than 46° Baume. 

. As indicated in an earlier paragraph, the demand for kerosene is 
fully supplied, and many of the refineries of the state do not attempt its 
manufacture. 

The various intermediate distillates, such as gas oil, stove oil and 
Diesel fuel oil. do not require further treatment before marketing. 
These oils sell at a comparatively low price. 



102 REPORT OP COMMITTEE ON PETROLEUM. 

Tlie oil from wliieh the vai'ioiis lubricants are obtained must ))e care- 
fully distilled, and are first freed froin oils lighter than 24° Baume to 
improve the lubricating (juality of the finished oil. The temperature 
of the process is controlled either by the use of steam, or by refining 
under a partial vacuum, in which case the products are given off at a 
lower temperature than when treated at ordinary pressures. The 
lubricating products are agitated with sulphuric acid to remove the 
asphaltum and tarry matter, and then with caustic soda and water. 
They are frequently filtered through bonel)lack or fuller's earth to 
lighten the color and to improve the lubricating value. Cylinder oils 
are among the most expensive products fi'om petroleum. 

At some of the refineries of the state high-grade medicinal oils nir 
manufactured. These oils are expensive, but are in great demand, and 
have taken the place of the Russian oils formerly imported into America. 

VI. Future Development of Refining Process, 

If the conclusions in Chapter VIII as to the increased use of. Cali- 
fornia gasoline and lubricants in the Eastern states are correct, then 
further improvement must be developed in the refining ])rocess for the 
production of additional quantities of gasoline, and greater quantities 
of low gravit}^ oil will be treated for lubricants. 

1. Increased Gasoline Output. 

Increased gasoline output may be accomplished by one, or both, of 
two methods. First : By the lowering of the gravity of the gasoline, 
as has been done in the past, which, with a corresponding change in 
carburetor construction, might be carried down to approximately the 
gravity of kerosene. In this connection it is interesting to note that, 
with the present grade of gasoline, a decrease of 1° Baume in the 
gravity of the gasoline produced will result in an additional yield of 
]0 to 15 per cent of gasoline. A second method of increasing the 
quantity of gasoline is through the development of a commercial "crack- 
ing" process. Essentially, the "cracking" process, as defined by 
Rittiiian, consists in heating oils to such a temperature that the heavy 
molecules decompose into lighter molecules with the production of 
ini.xturcs of loWer' boiling point. This may be accomplished l)y loiiu 
exposure to a" degree of heat below tlie boiling' point of a particular 
hydrocarbon, resulting in its dissociation or partial alteration. The 
control of this reac^bn which takes pL'ice^isvery delicate, and depends 
upon the absotu'fe control of tlie leiiipeVature'ancl pressure. A dumber 
of processes have been completely worked out in refinery laboratories, 
and have been',|parViSlly developed fpr 'tlie 'c6i^ "cracking"' of 

heavy oil into'gasoliiie hydrocarbons. The.'firet attenqits at " drkckihg '" 



Deliveiy 



Refinery 

Keflnory 

Avila Refinery 

Avila Refinery 

Avila Refinery 

Avila Refinery 

Los Angeles 

Bakersfield and Taft 
Avila Refinery 



Avila Refinery 

Los Angeles 

Bakersfield, Taft, etc 

Refinery 

Refinery 

Refinery 

Refinery 

Refinery 

Refinery 

Refinery 

Avila Refinery 

Avila Refinery 

Avila Refinery 

Avila Refinery 

Avila Refinery 

Santa Maria, etc. 

Los Angeles, etc. 

Los Angeles, etc. 

Sold as gasoline, gas, etc. 
Los Angeles, etc 



Refinery 
Refinery 
Refinery 
Refinery 
Refinery 
Locally 
Locally 
Refinery 
Refinery 
Refinery 
Locally 
Refinery 
Refinery 
Own use 



Plant started end year 1916 
Plant started end year 1916 



Started May 1917. Will pro- 
duce 24 bbls. daily. 
Now under construction. 
Now under construction. 

Now under construction. 
Started early part year 1917. 



Started early luirt year 1917. 



Now under construction, 
jiroduce 8 b))ls. daily. 



Will 



Now under construction. 




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KKFINING OF CALIKOHNIA OIL. 103 

were luidei'takei] at atmospheric pressures. In English patents, tem- 
peratures as high as 900° C. have been used. In the IMeAffe patented 
process, aluminum chloride is used as a catalyzing agent. This process 
has been tested by the Gulf Retining Company on oils from the Mid- 
Continent and Gulf Coast fields, but, as reported, without commercial 
success. 

The most important and promising methods thus far introduced for 
the "cracking" of California petroleum are the Burton process and 
modifications of the Rittman i)rocess. The first is controlled by the 
Standard Oil Company, and has been successfully used for years in 
Plastern refineries. At present the Standard Oil Company of Cali- 
fornia has a battery of ten stills in their Richmond refinery, using this 
method in the manufacture of gasoline. The process is limited to dis- 
tillates Avith a boiling point of 400° F. or above. The operation is 
carried on in large stills subjected to this temperature, and as the stills 
arc directly connected to the condenser and the pressure is controlled 
by the discharge from the condenser, a pressure of four to six atmos- 
pheres is maintained throughout the system. The condensate from this 
'"cracking" is finally distilled under atmospheric pressure to form 
gasoline, and the residuum may be returned for repeated reeracking. 

In the Rittman process the "cracking" takes place in small tubes, 
and the material treated is kept in a gaseous condition throughout the 
entire operation. High temperatures of 500 to 800° C. have been used 
with various pressures from ])artial vacuum up to 300 pounds per square 
inch. The difficulties with this process have been the difficulty of con- 
ti'ol of the high temperatures and the formation of a carbon deposit 
inside the tubes. One modification of the scheme now used with 
.•ipjiarent success at one of the California refineries for the treatment 
of low-grade distillate is the introduction of live steam into the tubes 
for the control of temperature and pressure. 

At the present time all the California refining companies are experi- 
■menting with "cracldng" processes, and inasmuch as various methods 
have 1)een .successfully worked out in the refinery laboratoi'ies and in 
miniature refineries, it seems certain that in time the mechanical diffi- 
i-iilties which have stood in the way of large sc^kle eonimfercial success will 
1)0 overcome. 

VIT. Casinghead Gasoline. 
Ill the hist eight years several processes for the production of casing- 
head gasoline from wet gas have been developed. These methods serve 
a double purpose, since they result in the saving of a valuable constituent 
of the gas, which was formerly wasted, and also add about 10 per cent 
to the present state production of gasoline. Table 17 is a statement of 



104 REPORT OF COMMITTEE OX PETROLEUM. 

tlie casinghead gasoline plants in California, with data relating to tlieir 
situation, methods used, volume of their output and its disposition. 

The principal processes used in the production of gasoline from wet 
gas are : First : compression and cooling, and, second, absorption. The 
compre.<5sion and condensation of gasoline vapors from natural gas is 
exactly analogous to the compression of air and the accidental condensa- 
tion of water vapor in the air receiver. The mechanical apparatus 
employed is ordinarily a two-stage compressor. The gas is cooled by 
running it through coils sprayed with water, and then allowing it to 
stand from pressures of 250 pounds down to 50 pounds by forcing it to 
operate the compressor. In the a})sorption process, natural gas is forced 
in pipes into intimate contact with a heavy oil which carries no gasoline 
The gas deposits its gasoline vapors in the oil. and this gasoline is sub- 
secjuently recovered by distillation at the refinery. 

It is probable that the total casinghead gasoline production for 1917 
Mill amount to 600.000 barrels, of which about 500,000 barrels will reach 
the market through the refineries, and the ])alance of 100.000 barrels 
will 1)6 marketed directly after blending with low-grade distillate. Dr. 
Rittnian has estimated that the production of casinghead gasoline in the 
United States is approximately 5.000.000 ])arrels for 1917. 

SUMMARY. 

The following are the principal facts in regard to the refining of 
Talifornia oil: 

First : Approximately 60 per cent of the oil of the state is now 
refined in part before being utilized. 

Second: The principal present market ilemajid is for gasoline and 
I'csiduum for fuel. 

Third: A greatly increased demand for gasoline and lubricants may 
l)e anticipated in the future. 

Fourth: This increased demand will re.sult in the refining of a 
large proportion of the oil and a smaller quantity of crude burned as 
fuel. 

Fifth: Improved methods of refining are being developed which will 
increase the yield of gasoline and lubricants i)er barrel of oil treated. 






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104 REPORT OF COM MITT 

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104 

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CHAPTER VIII. 

UTILIZATION. 

I. Character of Pacific Coast Fuel Situation. 

The utilization of California oil offers a very fa.scinating study. 
The more so, because up to the time of this investigation no general 
information was available as to either the exact territory or use to 
whicli oil and its products were distributed. The larger oil companies 
in tlie operation of their own business, have always been in complete 
touch with the markets, and have developed new contracts each year 
until the present oil shortage compelled a change in this policy. But 
each of these marketing companies lack definite knowledge a.s to the 
l)usiness of their rivals, and only by obtaining confidential information 
from each company, and assembling all items of sale to reach a total 
figure, could the committee create a representative picture of this phase 
of the industry, as shown in Tables 19 and 20 and Plates XXII, XXIII, 
XXIV, XXV. 

The entire Pacific coast must be considered in viewing these statistics 
on the use of California oil, as the fuel situation in the Western states 
and on the Pacific is fundamentally different from that in other parts 
of the United States. On the Atlantic coast, throughout the Missis- 
.''ippi Valley, and even in the Rocky Mountains, both coal and oil are 
available. In fact, the great Mid-Continental oil fields, through 
extensive pipe lines, are tributary to the commercial centers of the 
Atlantic and Gulf coasts. Moreover, the relatively denser population 
of these Eastern states has demanded an enormous quantity of the 
manufactured products of oil. Gasoline, distillate and lubricants have 
l)ecome a familiar and necessary part of the daily life of the nation, 
and practically the entire output of the Eastern and Mid-Continental 
oil fields has been required to meet this demand. Coal has, therefore, 
remained the foundation-stone of industry and commerce as the fuel 
of universal use. 

On the Pacific coast, the deposits of coal now developed and suitable 
for industrial use, aside from the coal fields of Washington and Van- 
couver Island are negligible, and the high transportation costs, with 
the difficulties of coastwise shipping would have combined to make the 
substitution of any economical fuel for coal an easy and rapid tran- 
sition. And the remarkable development of the California oil fields 
following 1900, the early excess of heavy oil, suitable at the time only 
for fuel purposes, gave the rapidly expanding industries of the coast 
a satisfactory solution of their fuel problems. Unlike the situation in 
the East, the demand for the refined products of California oil was 
small, the proportion of distillates and lubricants taken from the crude 



lOG 



REPORT OP COMMITTEK ON PETROLEUM, 



in the first days of refining was disappointing, and the ratio of crude 
of refining gravity to the heavier fuel grades was 10 per cent and less. 
These conditions combined •to cause the widespread adoption of oil, 
which seemed a logical source of power and heat. 

II. Dcvelupmi ni of Fuel Oil IiKliislrj/. 
The oil industry in California is still essentially a fuel oil industry, 
and, Avhile the proportion of refined products has steadily increased, 
the immediate problem occasioned by the shortage today is that of 
supplying for the entire Pacific coast adequate fuel for industrial and 
locomotive boilers, rather than one of furnishing supplies of gasoline, 
kerosene and distillate. If the problem is to be solved efficiently, in 
the future crude oil of refining quality must not be sold as fuel. 
Secretary of the Interior Franklin K. Lane, in his annual report for 
1915, stated that: "An absolute government would prohibit a barrel 
of oil being used for fuel before every product of kerosene, gasoline 
and other available constituents have been taken from it." This state- 
ment, which is unquestionably true, has been widely quoted, and has 
been ably discussed, with reference to California, by Mr. M. L. Requa in 
Senate Document 263. 

TABLE 21. 

TOTAL AND NKT CONSUMPTION OF CALIFORNIA OIL. 

(Average monthly in barrels of 42 gallons, January-May, 1917.) 





Barrels per 
month 


Total 


Gross production _ _' 


8,000,000 
1,100,000 




Drawn from storage _ _ 












Total consuiiiitt ion - _ _ . _ _ 


9,100,000 
730,000 




Fiold consumption and loss 


260,000 




Pil)0 consumption and loss _ 


210,000 




Refinery consumption and loss -- 


260,000 










Total consumption . 












Not con.'iumiit ion 


' 


8,370,00<J 










Sold as crude oil ^^-^ '^... — , 


3,000,000 
4,000,000 




Sold as residiuun _ -- 










Total fuel oil . _._*_. 




7,OOaQ0O 


Hclinerv products '-. ' 




1,370,000 










TolMJ 


3,370.000 









A total of I). 100, ()()(> l)arrels of Calilornia oil is now consumed 
luontlily. of wliich approximately 8 per cent is used as fuel oil in the 
oil industry itself. Of the net amount remaining, over 80 jier cent 



107 




/ 



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4,000 
lately 
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106 



in the fii^— -^ 

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which SI 1 __»-«-»-...«»._«i«i_-— —»__«_ 

The oil 1 
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Senate D 



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UTILIZATION. 



107 



sitiia- 
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107 






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UTILIZATION. 107 

is burned under boilers. This should be contrasted with the oil situa- 
tion in the eastern portion of the United States, where approximately 
80 per cent of the production is sold as refined products, and only 
20 per cent is used as fueLT^The relatively small amount of the oil of 
California, which is sold in the form of refined products, is shown in 
Plate XXVI. However, of the 7,000,000 barrels of fuel oil burned 
monthly, 4.000.000 barrels are refinery residuum remaining after the 
crude oil has given off gasoline, and, in some cases, gas oil, kerosene 
and lubricants. 

The proportion of oil produced of over 20° Baume during 1916, with 
comparative figures for 1907, is shown below, and also by Plate XV. 



Oil under 20° Oil over 20" 

Baume, Baume, 

barrels barrels 



1907 
1916 



36,000,000 
39,000,000 



4,000,000 
53.000,000 



The corresponding increase in the proportion of oil refined is dis- 
cussed in Chapter VII. 

The realization of the limited oil resources of the state has come only 
in the last years, when the tremendous expansion of the automobile 
industry, the growing demands of an export trade, fostered when 
supply threatened to flood home markets, and now grown burdensome, 
and the urgent needs of the nations at war, have shown that production 
once supplying an excess for storage has been outstripped l)y con- 
sumption — with rising prices, efforts to increase output materially have 
failed, and the shortage is an actuality. 

III. Rapid Growtli of Pacific Coasl IiulKsfries. 

The rapid growth of the industries of the Pacific coast, and the 
attendant expansion of the Western railrdads, all oil burning since 
1906, is clearly the predominate factor in the present shortage. Tlie 
chief use of fuel oil, as indicated in Table 19, is for transportation pur- 
poses. Plate XXII A shows the Pacific coast railroads, the shaded por- 
tion being the divisions operated by California fuel oil; the map also 
shows the chief industrial centers where there is heavy consumption 
of oil. As an index to the increased use of fuel oil by railroads of the 
state, it will be noted in Table 22 that in 1906 the total consumption 
was 10,864,000 barrels, while the use for 1917 is estimated at 21,844,000 
Imrrels. In 1902,. the Southern Pacific Railway, used approximately 
2,000.000 barrels of oil, while for 1917 the estimated consumption is 
16,000,000 barrels for this one company. During this period, the 
traffic efficiency of the railroad has increased so that the freight drawn 



108 RKFOllT OF COMMITTKK ON PETROLEUM. 

one mile by the power developed from one barrel of oil has grown 
from 750 tons to 930 tons. During the period of the last ten years, 
the total consumption of oil by the following railroads has increased 
on an average of 10 per cent per year: Southern Pacific, Santa Fe, 
Western Pacific and Northwestern Pacific. 

A measure of the general increase in use of California oil is 
given by the increased shipments from the fields year by year. This 
shipment, as shown in Plate XXVII, has grown at the average rate of 
15 per cent per annum for the last fifteen 3'^ears, and while the demand 
in 1914 and 1915 fell below this ratio, the rate of increase in 1916 
and the first half of 1917 is ample proof that a greatly increased 
demand for California fuel oil and the refined products can be antici- 
pated. The rise in price will discourage this demand to some extent, 
but it must be remembered that developed industries must continue to 
burn oil at any price as long as no other suitable fuel is available. 

IV. JJtilization of Fnd Oil. 

At the present time, in addition to railroad use, the Pacific steam- 
ship lines, both those operating along the coast and those engaged in 
export trade, and public utilities, which include the telephone, gas 
and electric, water and street railway companies, are all large con- 
sumers of fuel, and are now wholly dependent upon oil. The varied 
use of oil in the industries is shown by the fact that the marketing 
companies have large contracts witli mining and smelting companies, 
the manufacturers of explosives, chemicals, fertilizers, salt and soaj), 
with tanneries, steel w^orks and foundries, shipbuilders, stone- 
quarries, lime and cement plants, lumber and planing mills. 

In the production of food, fuel oil is used in farming for pumping 
and traction engines, in sugar refineries, ice plants, restaurants, 
bakeries and creameries. Under miscellaneous, in Plate XXV, is 
included the heating of buildings, such as hotels, apartment houses, 
offices, schools and hospitals, the United States government, state and 
country demands, the oil jobbers, the Avineries, breweries and distil- 
leries, construction and reclamation work, printers and publishers, tlic 
packing houses, silk, felt, cotton and wool mills. 

In Plates XXII to XXV, and Table 19, the general distribution of 
California fuel oil is shown in detail. 

V. Iiiorasf ill Shiprnoits. 

As indicative of the expansion of industries outside of California, 
de])indent upon fuel oil, the following facts are worthy of note: Sill^^ 
191'-. the quantity of oil required for the operation of mines and 
smc'ters in Nevada and Arizona has moi-e than doubled. 



09 




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110 REPORT OF COMMITTHK ON I'KTKOLKl'^r. 

The Canadian demand has ineivased four and one-half times since 
]!)()9, and, though coal is comparatively cheap, the greater convenience, 
assurance of supply and economies of operation afforded by oil have 
made its continued use certain in a majority of instances. Fifty 
per cent of the consumption in Canada and in AVashington and Oregon, 
supplied by California companies, is credited to the railroads. The 
Canadian government requires the burning of oil through certain 
forest reserves, as a matter of tire precaution, and, for the same reason, 
our Northwestern railroads are further influenced to use of oil as fuel. 

The market is still expanding, as is shown by the shipping records 
of Northwestern ports, from Portland to Alaska, where an average of 
1,520,000 barrels monthly was docked the first five months of 1917, 
as compared to an average of 1,460,000 barrels for the corresponding- 
period of 1916. 

Tlie annual shipment of oil to Alaska has increased two and one- 
lialf times since 1909, while the annual shipment to Hawaii has 
doubled in the last ten years. 

\M. rtilliatio)! of lu filial Products. 

California uses 58 per cent of its entire gasoline production, 41 per 
cent of the distillates, motor oils and tops, 80 per cent of the kerosene. 
It is evident that the greater amount of this gasoline consumed at 
home is purchased bj' automobile owners, and in that connection it 
is interesting to note the rapid increase in the number of motor 
M'liicle registration in this state. The total of licenses issued in 1905 
and 1906 was 8,732. In 1910, the number of automobiles in use was 
approximately 45,000. The total number of automobiles registered 
from 1905 to 1913, inclusive, was 123,582'; the actual number in use 
at the latter date can not be determined. The registrations for 1914, 
under the new license system, were 122,100, which fairly represents 
th(> number in use. Tliis was increased to approximately 200,000 
in 1916. 

The output of California gasoline is now approximately 430,000 
barrels monthly, and the 60 per cent of home consumption would 
give 250,000 barrels for the automoliiles of the state. 

The parallel curve for the increase in automobiles in use over the 
United States is shown in Plate XXVIII, with the per cent of 
increase in gasoline production, and in crude oil production. 

.Vpproximately 110,000 barrels of lubricants are produced each 
month, marketed largely on this coast. Various grades of spindle, 
light, medium and heavy motor oils are refined, and the use is as 
tliversified as are tlie industries which require lubricants in their 






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9,724,527 
1,727,415 




3,241,.5(X> 
.57.5,805 


8,.59.5,010 








1,989,78.3 


























16,.352,186 

661,fKJ2 

772,375 

1,4.56,245 




16,451,934 

817,125 
428,670 
948,033 




.5,48.3,978 

272,.",75 
142,8WJ 
316,011 






• 




















101,795 

2,966,708 

312,814 

.55,fJ64 


2,:{63,8.37 
1,022,187 
2.57,421 
2,2(M;.8'14 
1,18.5,78.3 


' .3,«85'917' 
220,041 


2,106,0?J6 

],0(J.5,801 

293,.5f;2 

l.H98,:570 

(irA.-.iTA 

1,621,0.53 
3,776,439 

122,061 


1, 228,639 
7:J,.'M7 
.7>,fH)0 


702.012 
3.35,207 
97,8.54 
0;{2,7WJ 
217.118 




],'M].(m 






.540,.3.51 




29f!,148 




l,2.58,Ki;{ 


*.3.53 






4^1,687 


*.5^H^8.53 
♦1.613.611 


91,007 
180,7.7) 


♦l,1.57,'i4« 


1.52,421 
2fiO,616 


•118,1W3 

♦W.5,782 


.50.807 
86.872 


2.174,817 

.5(J2,761 
6.270,768 

22,797,705 
1.55,793 


570,971 

2,872,045 
32,.529,617 


1,514,055 

311,787 
.5,89f^,WKi 

22,45.5,8.37 


.535,098 

3,2.58,0.54 
.33,791 ,.529 


.504,68.5 1 178,:i66 

10.3,929 ' 1,0H«.018 
l,9fi6,6fJ0 : 11,26.3.843 

7,48.5,279 1 




8.100 




2.700 










29,224,266 


32,.529,617 


28,363,737 


.33, 791 ,.529 


9,4.54,-579 | 11,263,843 

1 






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i ^VA'^.CfNN^^v 



UTILIZATION. 



Ill 



operation. Of the lubricants shipped to the Eastern states, a large 
proportion is compounded with Eastern oils. 

Distillates are used as fuels for internal combustion motors, botli 
the slow speed marine t3^pe for small vessels and the four-cylinder 
engine of the commercial motor truck. The increased use of Diesel 
and semi-Diesel engines has created a new demand for low grade 
distillates, and the proposal of the United States Shipping Board to 
use this type of motor for the equipment of their new fleet would 
re([uire a great amount of this fuel. 

Kerosene was once the refined product of greatest value, and still 
lias a limited domestic market as an illuminating and stove oil. 

Gas oil is in great demand for the manufacture of artificial gas, 
and, in spite of the improved efficiency of the gas companies, and the 
use of natural gas in a large portion of the state, the consumption of 
gas for domestic purposes has grown so rapidly that there will ])e 
great difficulty in providing a future supply of oil suitable for this 
purpose. 

In the construction of the automobile highways of the Pacific coast, 
large quantities of asphalt and heavy road oil have been and are being 
used. 

Plate XXIX shows the present distribution of the refined products 
of California petroleum. 

VIT. Foreign Trade. 

Foreign trade, as stated above, has grown from a very desirable 
market for surplus of fuel or refined oils, to one which, as far as 
gasoline and fuel oil are concerned, is now insistent and inconvenient to 
the marketing companies. The exports of mineral oil from California 
ports now approximate IS per cent of the total United States exports, 
and the growth year by year of the foreign trade is accurately 
reflected in the figures of the two customs districts of this state. 

The effect of the great war on export conditions in the United 
States is strikingly sho^^^l in the accompanying table (Table 23). 
France, England and Italy took little oil but refined products previous 
to 1914, and shipments were all from our Eastern ports, where the 
Pennsylvania and ]\Iid-Continent refined stocks were used. In 1914, 
the total to the Allies was noticeably increased, though Belgium's quota 
was practically completed August first of that year. The following 
two years saw the refined shipments to Prance, England and Italy 
steadily increase, fuel oil gaining at somcAvhat smaller ratio than gaso- 
line, naphtha and benzine. In 1913, the gasoline shipments to the 
three countries totaled 1,400,000 barrels, and in 1916 this figure was 
7.614,000 barrels, a tremendous drain on the petroleum distillate 



^y) REPORT OF COMIMITTEE ON PETROLEUM. 

stocks of the country. Of the lubricating oils exported, two-thirds 
now go to the Allies. 

Exports to neutral nations of Europe have, in most cases, diminished 
since August, 1914, especially as to the ports within the war zone. In 
the Far East the use of American refined oils is so general that tlie 
heavy shipments to British India, China and Japan have continued, in 
spite of high costs and transportation difficulties. These countries con- 
stitute the principal market for California kerosene. 

In our Western Hemisphere, the South American market has con- 
tinued firm, and the nitrate and mining industries of Chile have 
demanded a larger share of fuel oil each year. 

California's Share of Foreign Trade. 

California's share of these foreign consignments is largely conlincd 
to Central and South America for fuel shipments, to England and 
Australia for gasoline and distillates, and to the Far East for kerosene. 
(See Plate XXX and Table 24.) 

Practically 50 per cent of this country's oil exports to China and 
.!apan. and 25 per cent of British India shipments are from California 
ports. Kerosene constitutes by far the greater portion of these oils. 
Sliipments to China and Japan during the last twelve months (June 1, 
1917) amounted to 1,850,000 barrels, four-fifths of all illuminating oil 
exported from the state. British India, in the same time, took some 
:U)0.000 barrels, one-tenth of the total exports. 

The exports of gasoline from the two California customs districts go, | 
in large degree, to Australia and Oceania, with the Philippines taking 
10 to 15 per cent of the total. 

England confines her purchases, consigned directly from California 
to AUied ports, to distillate, and buys approximately two-thirds of the 
total exported from California, while her colony, Australia, gets 
iinother 25 per cent. Lubricating oils go largely to Australia and 

Oceania. 

A considerable portion of the California ga.soline sent through the 
Panama Canal to Eastern ports is reshipped to England, and is not, 
therefore, credited to California. 

The total export of California oil, including shipments to noucon 
tiguous territory, has increased five-fold since 1911. 

VIII. Increased Future Demands. 

1. Industrial. 

In connection with the increased export demand, the potential shoi 

age of oil over the entire United States should be noted. In P'.if 

XXXI is given the oil export trade in the United States since 



UTILIZATION. 



113 



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^^.> REPORT OF COMWr 

stocks of the country. Of tlie 1 
now go to tl 
Exports t 
since Angus 
the Far Ea; 
heavy shipm 
spite of high 
stitute the p 
In our W 

tiuued firm, 

demanded a . 

California' 
to Central a 
Australia for 
(See Plate X 
Practically 
Japan, and 2i 
ports. Keros. 
Shipments to 
1917) amount 
exported from 
800,000 barrel;^^^^^^! 
The exports ^^^^-^i 
in large degre. , 

10 to 15 per ct^^^^^^^j 

England cot 
to Allied ports 
total exported 
another 25 pe^^^^^ 
Oceania. 

A consideral:v>|sJ!<:^':>'^ 
Panama Canal 
Iherefore, eredi 
Tlie total ex] 
tignous territor, 




In connection AV^^'bV^ 
ago of oil over Inxv^v^nX^ 

XXXI is ^iven the oil export trad. 






UTILIZATION. 



113 




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114 REPORT OP COMMITTEE ONT PPyrROLEFM. 

Hiid in Plate XXXII the relation l)et\veen the yrowth of ernde oil and 
refined oil shipments is shown. 

The figures from which the year 1917 were estimated in Plate XXXI 
did not take into consideration anything more than the ordinaiy 
industrial demand. It is apparent that consumption is increasino; 
rapidly over the entire United States, and that export shipments in 
the Allies must be at least maintained at the present level, while liic 
production has reached and passed a maximum. 

2. Demand Occasioned by the War. 

The war demantl on our own country is difficult to estimate, but one 
item may be taken as indicative of the importance of oil in modei-n 
warfare. If the proposed fleet of 22,000 aeroplanes should be built and 
transported to the European battlefront, approximately 500,000 barrels 
of gasoline per month would be required to keep one-quarter of thcs' 
machines in air one-half the time. This is approximately one-tenth oi 
the present total production of gasoline in the United States, and 
exceeds the gasoline production of California. 

AVithin the boundaries of the United States, the problems attendant 
upon the movement and mobilization of troops, and the shipment nl' 
army supplies will impose a heavy service uj^on the i-ailroads of the 
country, which will result in an increased consumption of fuel oil. 



SUMMARY. 

The most important facts in regard to the utilization of California 
oil are: 

First: Fuel oil is now essential to the transportation service ami 
industrial development of the entire Pacific coast. 

Second: The development of this fuel oil market has been due to \\\r 
scareit,y of other fuel and the excessive production of heavy oil in Hi'' 
early development of the fields of the state. 

Third: The refined products of California oil are widely distributi il, 
through export and domestic shipment, and (California gasoline ami 
lubricants have been supplied to the Allies. 

Fourth : This demand for these refined products is rapidly iiu-rea^- 



ing, and will be accelerated by the potential oil shortage in other oil 
fields of the United States, and by the necessity of using Califoi-nia 
oil both for industrial and warfare purposes to offset this shortage. 

Fifth: To meet this increasing demand, California oil must be used 
more efficiently. Crude oil of refining quality must not ho sold as fuel, 
and substitute forms of fuel and ])owei' nuisl be develojted as rapidl\' as 
possible. 



CHAPTER IX. 




MEDKEltfOrEnM 



At^wi.nMaiimij^ trie most' acTiVe ariiim^; ir " is'' a^iiotiuf'' wiiether 
odiictum of California petroleum in 1917 will exeeod the nrodnetion 
1J)1(3 by 2,000,000 barrels, if at all 




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]14 



REPORT OP COIV 



and in Plate XXXII the relati 
retined oil shipments is shown. 



1 1 fTM iTT iT jj" 1 '^ ^ II' ■ 



iLliil L UJiT tiiTrrtl 





n^oi^,^,. . . 

and substitute forms of fuel ;i 
possil)le. 




CHAPTER IX. 
GENERAL REVIEW. 

Production and Consumption. 

lu this chapter we shall ^■i^•e a general review of the salient facts 
of pi-esent production and consinnption of California petroleum and 
its products, with a reference to the outlook for the future under present 
tendencies of production and consumption in California and otliei- 
sections of the Cnited States. 

I. I'resoit J'ni(1i(rtion. 

As appeal's in Chapter IV of this report, the production of petroleum 
in California increased from 4,320,000 barrels in 1900 to 77,700,000 in 
1910, 83,740,(W0 in 1911, 90,070,000 in 1912, 97,870,000 in 1913, and 
103.()20,000 in 1914, the year of maximum production. 

In 1915 production fell sharply to 89,570,000 barrels, which pi-oduc- 
tion was slightly increased in 1916 to 91,820,000 barrels. 

Oidy by the greatest activity in drilling is California peli'oleuni |)r()- 
duction ])eing maintained. 

II. Fr(seiil ('oitsmnpflou. 

The consumption of California petroleum has been increasing at the 
rate of approximately 15 per cent annually. 

In 1916 the consumption reached a total of 104,930,000 l)arrels. l)eing 
13,100,000 barrels in excess of production. 

The effect of constantly increasing consumption has been the reduc- 
tion of stocks from over 60,000,000 barrels in 1915, subsequent to the 
hringing in of the IMidway field, to slightly in excess of 37,000,000 
harrels on July 1. 1917. 

III. Aiiiicipafcd Product io)i. 

I'roduction during tlie fii'st five months of 1917 is i-eported by Stand- 
ard Oil Conii)any to have been 39.801,()10 l)an'cls, being an average of 
263,587 l)arrels per day. 

Although a net average of 52 i)roducing wells was added during each 
month from January 1 to June 1, 1917, ])roduction during this period 
was l)arely maintained. Average daily i)roduction ro.'^e from 262.000 
barrels in January to 269.000 l)arrels in April, l)ut fell again to 2()1,00() 
harrels in JMay. 

Notwithstanding the most active drilling, it is doubtful whether 
production of California i)eti*o]eum in 1917 will exceed the pi-oduction 
of 1!)16 by 2.000,000 ban-els, if at all. 



116 REPORT OF COMMITTEE ON PETROLEITM. 

IV. Anticipaicd Consuniplion. 

During tlif ili'st five months of 1917 shipments of California petro- 
leum from the fields, as reported by Standard Oil Company, amounted 
to 45,216,724 barrels, being 5,415,114 barrels in excess of production. 

If this excess of consumption over production is maintained through- 
out the remaining portion of 1917, 1917 consumption will be approxi- 
mately 106,000,000 barrels, or 13,100,000 barrels in excess of production. 

It will be observed that this excess, which it will be necessary to take 
from storage, is exactly the same as the depletion of stocks in 1916, not- 
withstanding the fact that during the period from Januarj^ 29, 1917, to 
June 1, 1917, over 1,100,000 barrels of fuel oil were transported by 
Union Oil Company from Mexico to Chili instead of being transported 
from California, as "was the case in 1916. 

The increased demand for the products of California petroleum 
(hiring the last few years will be helpful in determining the anticipated i 
increased demand for such products in 1917. 

The production of lubricants by one of the California refining com- 
jianies, which may be taken as typical, was two and one-half times as 
great in 1916 as in 1912. The production of distillates by the same 
company was three times as great in 1916 as in 1912, and the produc- 
tion of gasoline was more than three times a.s great. 

This company's production of gasoline in 1916 increased 23 per cent 
over the production of 1915, while the increase in the production of 
]ul)ricants was 44 per cent, and of distillates 71 per cent. 

From such data as we have been able to secure we conclude that the 
demand for the products of California petroleum will be considerably 
greater in 1917 than even the large demand of 1916. 

The demands on California petroleum and its products must inev- 
itably be influenced by the conditions of production and consumption 
of petroleum and its products in the other sections of the United States. 
A concise statement of the present status of the petroleum industry in 
the United States with reference to production, consumption and 
.storage is contained in letter dated May 24, 1917, from Mr. Van H. 
:\[anning, director of the Bureau of IMines, and Mr. George Otis Smith, 
(lii-cctor of the Cxcological Survey, to INIr. Bernard Baruch, chairman 
of the Committee on Raw ]\Iaterials, ]\Iinerals and Aletals of the Council 
of National Defense, which letter appears in the pul)lished testimony 
given on June 13, 1917, before the Committee on Public Lands of the 
United States Senate. We quote herewith the recapitulation of the 
condition of tlio petroleum industry of the United States as set forth 
in this letter. 



GENERAL REVIEW. 



117 



' ^RECAPITULATION. 

"The production for the year 1917 may be approximately 
9,000,000 barrels less than it Avas last year. Should the Mexican 
supply be withheld (some 42,000,000 barrels) our total available 
supply would be reduced about 51,000,000 barrels. 

**The demand for crude petroleum will certainly greatly exceed 
that for 1916. Estimates for the normal peace consumption for 
1917 have been made in the following table by computing the per 
cent increase for each of the last two years and assuming that the 
normal peace consumption for 1917 will increase at the same rate. 

"Table showing deliveries to the trade (consumption) during 
1915 and 1916, with an estimate for normal peace consumption 
in 1917: 



Consump- 
tion 
(barrels) 



Per 

cent 

Increase 



Production 
(barrels) 



Drawn from 

stocks 

(barrels) 



1914 247,015,396 

1915 I 276,399,918 

1916 312,000,000 

1917 *353,000,000 



12 281,000,000 None 

13 ' 296,000,000 18,500,000 
13 1 286,990,000 67,000,000 



*Based on a normal increase of 13 per cent. 



Stocks January 1, 1917 150,000,000 barrels 

Depleted by 1917, normal peace demand 67,000,000 barrels 

Stocks remaining- December 31. 1917 83,600,000 barrels 

"Attention should be drawn to the fact that the 1917 estimate 
in the above table is based on normal peace consumption. Figures 
are not available to show the increased demand due to the war or 
increased expoi-ts to the allies, but with the many additional uses 
to which gasoline will be put, such as fuel for the patrol boats, the 
demand for petroleum and its products will probably be larger by 
20,000,000 barrels than the estimated consumption given in the 
above table. 

"It requires no deep thought for any one to realize the serious- 
ness of the petroleum situation, when the total reserve stocks on 
December 31, 1917 — seven months hence — under certain conditions 
may not greatly exceed 50,000.000 barrels, which is only about two 
months' consumption. 

"The situation may be summarized in round numl)ers as folloAvs: 

Supply : Barrels. 

Estimated decrease in production for 1917 9.000 000 

Possible cessation of exports from Mexico 42,000,000 

Total decrease 51,000,000 

Demand : 

Estimated iucrea-se in normal consumption, 1917 41,000 000 

Estimated increase above normal consumption due to war, 1917 20!000!000 



Total increase 61,000,000 



Total deficit, December .31 1917 112,000,000 

Total stocks, January 1, 1917 150,600!000 

.-., , '-^otal stocks, January 1, 1918 38600 000 

(if the supply from Mexico is not interrupted this figure ^vill be larger.) ' 



118 REPORT OF COMMITTEE ON PETROLEUM. 

" These fi.irures are, of course. ])a.sed upon the assumption that 
retineries will be able to obtain all the crude oil they desire, which is 
an improbability. In fact, at the present time many retineries in 
the country are not running to full capacity on account of the 
.scarcity of crude. As a l-avge percentage of the total stocks in the 
country is held or controlled by a comparatively few strong com- 
panies, it is not likely that a shortage such as indicated by the 
above figures will exist. In fact, such a condition of affairs will 
be prevented by the law of supply and demand. As soon a-s it 
becomes necessary to draw upon the reserve stocks to fill the 
demand, the stronger companies will refu.se to part with their oil 
and the price will rise. 

"The calculations given above, which are based upon all the data 
of record in the Department of the Interior, show the present ten- 
dency of our .^upply and demand and make it of the greatest 
importance to take stei)s to meet the situation Avith no negative 
. effects on the outcome of the war and with as little confusion as 
possible in our indu.strial life. Therefore, a greater production of 
oil is necessary." 

xVs will be observed, ^Ir. Manning and ]Mr. Smith conclude that the 
total storage of petroleum in the United States will be depleted in 1917 
to the extent of 70,000.000 barrels if exports from Mexico to the United 
States are the same as in 1916. leaving a total storage on January 1, 
1918. of only 80,600,000 barrels. This storage would be sufficient to 
supply the estimated noi'mal demand.s of 1917 for only slightly over 
three montlis. 

The serious situation of the petroleum iiulnstry of the United States 
will undoubtedly be reflected in increased demands by other sections of 
the United States and by the Allies on the products of California petro- 
leum, if not directly on California fuel oil. 

The entry of the United States into war has made the situation even 
more critical than it otherwise would have been. 

As has frequently lieen said, oil is the basis of conducting this war, 
and everything depends on it. 

While Ave have been unable to secure data showing the exact extent to 
which the entry of the T^Tiited States into the war will increa.se the 
demand on ])etrolenm and its products, it seems inevitable that the 
battleshii)s, desti-ox'ers, i)atr()l boats, transj)()rts and other vessels of the 
navy, the motoi- fi'ucks and other motor vehicles used in the transporta- 
tion of men and materials f'oi- the army, the aei'()i)lanes. and the increased 
reipiirements of industry ivquiring petroleum products will create a 
largely increased demand for ])etroleum and its i)roducts. 

We are advised by Ilonoi-able Josephus Daniels, Secretary of the 
Xavy. that while the requirements of the Navy for fuel oil on the Avest 
( oast will not be greater in the fiscal year 1918 than in the fiscal year 
1917 the total fuel oil consumption of the navy for all pui-jjoses for the 



GENERAL REVIEW. 119 

tiseal year 1918 is estiiiiatt'd to be from 3,000,000 to 5.000,000 barrels, 
this being an increase' of from 1.500.000 to 3,500,000 barrels over the 
requirements of tlie fiscal year 1917. 

In addition to the other military fuel requirements of the United 
States in time of war, the present aeroplane program calls for the 
construction of some 22,000 aeroplanes. If it were necessary to operate 
continuously this entire number of aeroplanes, the gasoline consumption 
would be approximately 3,800,000 barrels per month. Inasmuch as 
estimates as to the percentage of continuous operation which will be 
expected of this new branch of the Army vary from one-tenth to one- 
fourth of the total number of nuichines, it may be assumed that the 
actual gasoline consumption of military aeroplanes alone will be not 
less than 380.000 barrels per month with a possible maximum of 970,000 
barrels. 

Reference to the increased denmnd on petroleum and its products. 
l)oth in California and other petroleum producing sections of the United 
States, caused by the war, is contained in telegram dated June 1, 1917, 
received by us from ^Ir. A. C. Bedford, chairman of the Committee on 
Petroleum of the National Council of Defense, reading as follows: 

" Replying to your dispatch ^lay twenty-ninth the increased 
(U'mand of United States Government and its Allies for gasoline, 
fuel oil and lubricating oil due to emergency created by war will 
be large. It is opinion of this committee that it will be difficult to 
promptly secure the necessary supplies and that California will 
naturally be drawn on to bear its proportion. At present time 
approximately thirteen steamers with total capacity of approxi- 
mately one hundred forty thousand tons are under construction on 
Pacific coast and will he ready for delivery within next eight 
months. It is expected that these vessels will be required to deliver 
cargoes of gasoline and probably fuel oil and lubricants to either 
Atlantic coast or European ports on their initial trips which will 
total approximately one million barrels petroleum products to be 
supplied. According to estimates of Army and Navy Department 
there will be large increased demand over normal requirements of 
gasoline and fuel oil in addition to increased demand from Allies 
and for munition and agricultural purposes as well as a propor- 
tionate increase of lubricating oils." 

\'. Xcccssiiij fin- Detailed Study of Possibility of Iiicrcasiiifj Production 
in- Decreasing Consumption. 

We conclude that, apart from the added requii"(nn(nits of the war, the 
consumption of California petroleum in 1917 will outrun production at 
least 13,000,000 barrels and that the demand for the products of Cali- 
fornia petrolevim will be very largely augmented. 

We c(-nclude, further, that the additional requirements of the war 
will still further increase the deficit in the production of California 



120 REPORT OP COMMITTEE ON PETROLEUM, 

petroleum and also the demands on the products of California 
petroleum. 

This critical situation can be met only by increased production or 
decreased consumption. In the following two chapters, we shall make 
an analysis of the possibilities of increasing production and of decreas- 
ing consumption of California petroleum so as to determine what relief 
can be secured from either or both these alternatives. 



CHAPTER X. 

FUTURE PRODUCTION— MAINTENANCE AND INCREASE. 

I. Nonnal Decline of Production. 

From the day it is brouglit in until it finally becomes unprofitable, the 
normal history of everj^ oil well is a steady decline in daily yield. The 
rate of decline is not the same in all wells. In general, it follows a curve 
(see Plate XIII) which is steep in the first two or three years and gradu- 
ally flattens out until it has a very low inclination in the last twenty 
years or more. In general, gushers and strongly flowing wells decrease 
at first more rapidly than pumping wells. The rate of decline is also 
influenced by other factors, most of which affect the rate at which the 
oil travels through the sand to the bottom of the well. These are 
discussed later. 

It follows from this that in any oil field the production can be main- 
tained at a uniform rate only by continually drilling new wells. In 
California, according to the district, this has been found to require 
from 6 to 20 per cent of new wells each year. 

The decline in the production of any district is influenced also for 
individual years by the shutting in of wells on account of low' prices 
and other influences, and by the idleness of part of the wells for repairs, 
cleaning out, and so forth. 

When the productive land within a given field is all drilled up, the 
decline of production becomes inevitable, since all the wells are then 
falling off. The decline follows a tolerably regular curve which can 
be calculated for any extensively developed field, if adequate records 
have been kept. Under the^e circumstances the total production of a 
state or country can be maintained only by the opening of good new 
fields at sufficiently frequent intervals. It is this process that has kept 
the production curve of the United States rising steadily ever since 
I860. When the last potential new field is fully developed, the decline 
in cur national production will become irremediable. To speak of main- 
laining production or of "sustained production," therefore, involves a 
latent fallacy, except where dealing Avith a .short space of time. 

These statements regarding the maintenance of production apply, of 
course, still more forcibly to the question of increase. 

II. Estimate of Increase Required. 

1. Amount. 
As explained in Chapter IV of this report, the consumption of 
California petroleum has been outrunning production for a j-ear and 
a half at the rate of 35,000 to 40,000 barrels per day. We may, there- 



122 REPORT OF COxMiMITTEH ON PETROLEl'Al. 

t't.iv. take tlie lesser figure as the minimiini net increase to be supplied. 
Siieli savings in consumption as are discussed in Chapter XI of this 
r(>port can hardly more than cover tlie further increase in consumption 
ihat will be occasioned by the war. 

Owing to the normal decline in the production of existing wells, avc 
nmst add to this figure a further amount equivalent to that decrease. 
Tlie decline is affected by so many different factors that it varies con- 
siderably from year to year. The best estimates range from 6 to 14 
per cent or higher. Mr. M. E. Lombardi has published for the year 1913- 
14 an estimate of 8.2 per cent for the entire state. As this agrees very 
closely with the best estimates we have been able to make independently, 
we may take 8 per cent as a conservative figure. This amounts to about 
20,000 barrels per day, making the required gross increase of produc- 
tion, over that to be. expected from the present wells, about 55,000 
barrels per day, or an increase of 22 per cent over the 1916 production 
of the state. 

It will be interesting to note that the only time such a rate of increase 
has been exceeded in California in the past decade was the year 1910. 
The preeminence of that year is to be ascribed partly to the perform- 
ance of the great Lakeview gusher, which gave a net yield of about 
4,000.000 barrels alone, or about one-fifth of the entire increase in 
California for that year. 

2. Time. 

We liave elsewhere estimated that the mai'gin of safety on stored 
oil will be reached about September, 1918. If the drilling of new 
wells is pushed as rapidly as it should be, the gradual increase in 
lu'oduction which will result Avill tend to defer that date by perhaps six 
months. We may, therefore, allow about one and one-half years to 
I'each the desired maximum increase in production. 

It is not worth while to attemj)t a closer estimate of the time required, 
because there are so many things which may change the situation. 
However, so far as we are able to foresee, they are more- likely to 
increase tliaii to decrease the consumptien, and this would tend to cut 
down the time limit. 

III. 1 1 (lie flic Increase May B( I'rovidcd WitJiin I lie Time Desired. 
The production nuiy be increased in ])art by better utilization of 
• 'xisting wells, but chiefly by drilling new ones. In so far as wells are. 
idle for unnecessary reasons, they could be put back_into service. Our 
nivestigations indicate that, with oil at present prices, nearly all of 
the wells in the state that can be operated are being operated. The 
only notable exception is that some of the wells in the Coyote Hills are 
being held in check temporarily because of lack of transportation facili- 
ties for the product. The production of a number of wells could be 



FUTURE PRODUCTION — MAINTENANCE AND INCREASE. 12;^ 

increased by deepeniug tlieni to lower and better sands, but generally 
it is unwise to do this until the upper sand is exhausted. There are 
some daniag'ed wells whieh nii<iht be put into eomniission again through 
repairing, but in nearly all eases where it is profitable, these repairs are 
being made ; and so this item likewise may be disregarded. Relief, 
therefore, can be secured only by the drilling of a large num])er of 
new wells. 

The essential factor.s which appear to demand consideration in con- 
nection with the drilling of new wells ai'e the following: 

1. :\Iaterials. 

2. Labor. 
8. Land. 

4. Transportation. 
"). Operators. 
G. Capital. 
7. Incentive. 

These have been arranged, not in order of intrinsic importance, but 
to suit the purposes of the following discussion. The ultimate object 
being the provision of petroleum and its refined products at the point 
of utilization, not one of the above factors can be neglected without 
courting failure. However, a surplus in one may in a measure counter- 
balance for a deficiency in another. Thus, with a larger amount of 
g(;od land, less capital, materials and labor would be recjuired. 

1. Materials. 

Tlie availability of materials u-ed in drilling, especially those which 
remain at tlie wells and hence can not be used over again, puts a more 
or less definite limit on the number of wells that can be drilled in a 
si)ecified time. A few wells require only one string of casing, many two 
or three, and some as many as six. In order to economize on casing it is 
llierefore nece-sary not only to choose locations where the oil sands are 
as near the surface as possible, but also where favorable conditions will 
permit the use of only one or two strings. In general, fewer strings 
are used where water sands are absent and conditions thoroughly 
known. The shortage of certain other materials also makes it oblig- 
atory to (h-ill as fcAv and as shallow wells as practicable. Hence every 
effort must be made to obtain wells of large individual yield. 

Reports from three leading oil well supply houses show that the prices 
of materials used in oil production have risen 25 to 300 per cent above 
those in effect in 1914. the average, being about 100 per cent. This fact 
alone is sufficient to indicate the existence of a serious shortage in mate- 
rials in California at the present time. A similar shortage is reported 
from all ether American oil fields. .Some of the smaller oil companies 
report that they have already been obliged to suspend drilling opera- 
tions because they are unal)le to obtain certain materials. 



124 REPORT OF COMMITTEE ON PETROLEUM. 

At present the supply companies are unable to deliver some of the 
(\ssential kinds of material and for some they can not even place orders 
at manufactories for delivery in any definite, or even indefinite, time in 
the future. The most acute shortage seems to affect the following 
essential kinds of supplies : 

10 -inch casing. 

Rotary drill stem pipe. 

Tubular goods in general. 

Boilers and boiler tubes. 

Wire cable. 

Gas engines for pumping. 

Manila rope. 

Some of the large oil com])anies have succeeded in contracting U)i- 
(Miough material for a year or more, and a few as far as the end of 19 IS, 
but the manufacturers are unable to make the goods fast enough to keci) 
jiace with the demand. On the other hand, we are informed that the 
railroads are making special efforts to expedite all matei-ial destined for 
the oil fields. Possibly some readjustments under federal control may 
serve to improve the rate of delivery. 

Under present war conditions, with large powers being given to the 
federal government to control manufacturing and traffic, and with 
heavy demands already made by federal ])ureaus for steel materials of 
all kinds, the oil-producing companies and supply houses are justified in 
fearing that even some of the supplies which are due them on contracts 
already made, may be diverted to other uses and particularly that tln' 
manufacturing plants will thus be prevented from making oil-well 
supplies, unless the interests of the petroleum industry are safeguarded 
l)y the government itself. 

On account of the variation in well depths and casing requirements, 
in different areas, it is im]>ossible to calculate accurately the number uF 
wells that could be drilled with a given amount of materials. Never- 
tlieless, using average figures, and on the basis of reports from Receiver 
Pa;\Tne and eight of the largest companies, controlling about 80 per cent 
of the existing wells, we estimate that hardly more than 600 wells can 
be drilled with the material now on hand or definitely contracted for. 

It is clear that without these materials the wells necessary for the 
maintenance and increase of production can not be drilled. On the 
whole, the shortage of material is probably much more serious than the 
possible shortage of labor. It is indeed one of the vital factors in the 
problem that confronts us. 

2, Labor. 

Drilling crews and other trained oil field employees are today 
definitely limited in numbers. Obviously the desired increase in pro- 
duetion can be obtained most quickly by drilling the new wells as 
rapidly as possible so that eaeh crew may di'ill more than one well in 



FUTURE PRODUCTION MAINTENANCE AND INCREASE. 



125 



the time fixed by the needs of the ease. It takes from 15 to 90 days to 
drill a well 1,000 feet deep, but from 60 to 300 days to drill one 4,000 
feet deep. A few wells have required one to two j^ears. These varia- 
tions among wells of the same depth are due to the fact that the rate 
of drilling is much slower where there are serious water troubles, beds 
of hard rock, or other factors that interfere with rapid work. 

The active campaign of drilling which is now in progress in most of 
the fields in California has absorbed nearly all of the qualified men 
available. On the other hand, about 2i per cent of the oil field 
employees of the state have entered the military service since the out- 
break of the war and a further 32 per cent, approximately, have regis- 
tered under the provisions of the Military Draft Law. The figures 
submitted to us by six of the largest oil-producing companies of the 
state are given in the following table and they are believed to be typical 
of the conditions throughout the California oil fields. 



TABLE 25. 
Men EmpJoycd in Field Production of Oil Mlio Have Yohintecrcd and Registered. 







Company 


iTotal 
field em- 
ployees 


n'oliin 


(eerea 


^Registered for 
draft 




Number 


Per cent 


Number 


Per cent 


A 






893 
582 

2.045 
441 
541 

=2,498 


33 

12 
90 
17 
25 
? 


3.7 

2 

4.4 

3.9 

4.6 

9 


390 
232 
750 
160 
125 
='628 




44 


B 
C 
D 
E 

y 






40 

36.5 

36.3 

23.1 

25 




Totals . . 








7,0CO 






2,285 




32 6 















'On April 1, 1917. 

i;.Iune 25. 1917. 

^Includes also men employed in refineries, along pipe lines, etc. 

Of the total number of men employed in the producing part of the 
oil business, 85 to 90 per cent are classed as skilled operatives. Among 
these are drillers, tool-dressers, pumpmen, machinists, engineers, gagers, 
foremen, geologists, superintendents and others. On the average it 
takes more than one year for any of these men to acquire the necessary 
skill and experience in their work. The value of an able and experi- 
enced drilling crew and their supervisors is evident to anyone who will 
take the trouble to review the hundreds of cases where wells have been 
spoiled through bad judgment or preventable accidents, or in which the 
oil sand has been injured or ineffectually tapped. Many of the 
unskilled laborers are also absolutely necessary to the conduct of the 
industry, in view of the heavy work required in many of the operations. 
To some extent, such men as carpenters, clerks, stenographers, boarding 



126 REPORT OF COMMITTKK ON I'K'rH( )I;KnM. 

house employees, and some others, eoiihl be i-eplaced without much 
difficulty, but the rest, particularly lliosc in positions of responsibility, , 
can ill be spared. I 

Reports submitted to us indicate that aljout 370 drilling crews were 
actively at work in California in June, 1917. They are completing 
over 60 wells per njonth, or between 700 and 800 per year. The loca- 
tion of this drilling- activity is shown on Plate XXXX. These crews 1 
are drilling on various kinds of land in all the oil fields of the state. , 
If they could all be transferred to those lands where drilling is relatively i 
easy and the depth not great, they could nearly double the number of 
wells finished per year. As shown on Plate XXXIV, the number of 
wells that will be required to meet the present emergency depends chiefly 
on the productivity of those wells. If they are not better than the pres- 
ent average for the state, it would require over 1,500 new wells, or about 
as many as the present drilling crews could be expected to finish in a 
year and a half, even under the most favorable circumstances. If, 
however, the new wells are as good as those that were brought in in ^May 
(exiiected to average nearly 110 barrels per day for the first year) the 
available drilling crews would be easily able to put down more than the 
number required. If, as the committee recommends, only the bettci' 
lands are used, then it would seem that the labor shortage is not inmii- 
nent, even if a reasonable proportion of the men should be taken for 
the military service. IBut the proviso nuist not be overlooked. j 

Giving due regard to the probable circumstances, we conclude thai 
the removal of any large number of the oil field employees from tlu^ii- 
present occupations would seriously injure the work of increasing the 
oil supply by drilling many new wells. In that event, it would seem 
that the only solution of the difficulty w(mld be some sort of govern- 
ment control of the industry, making it possible to use the remaining 
di'illing crews and other skilled laborers only on the most favorable 
and productive lands without regard to the present plans of operators 
in other parts of the state. This would give Ihc largest production ol' 
oil per unit of labor expended. 

3. Land. 
(I. WHY THE MOST FAVORABLE LANDS .\RE REQITIRED. 

It has already been shown that, as an abstract proposition, the bcsl 
lands to be di-illed are those which will give the largest yield i>er well, 
with the least exi)en(litui'e of hd)or and matei-ial, in the shortest sjiace of 
time. The accompanying diagram (Plate XXXIII) shows which of the 
California tic^lds have the highest average jjroduction per well. Plate 
XXXIV indicates that the retpiired increase in ])roduction would require 
an extraordinai'v number of wells if they W(»re all drilled on poor land. 
or. in other words, that the number of wells which i)ractically can be 






"SSX3 



127 

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FUTURE PRODUCTION— MAIXTEN'ANCE AND INCREASE. 127 

,1.-i11prl within 12 to IS months can u'ive the requisite increase only if 






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FUTURE PRODITCTION MAINTENANCE AND INCREASE. 127 

drilled within 12 to 18 months can give the requisite increase only if 
the laud yields more than ahont 70 barrels per well per day. Th(> 
diagram (Plate XXXV) also shows the average depth of wells in thij 
better fields. Depth is an important consideration, not only because it 
determines in part the amount of casing to be used, but because the rate 
of drilling at great depths is much slower than near the surface (see 
Plate XXXVI). 

AVe are not in a position to predict whether it will be more difficult 
to get access to the best lands or to o])tain the necessary supplies arul 
material. If the latter is true then the drilling of the best land becomes 
essential to success. From all the data at our command we believe that 
the release of the lands is possible. ])nt the sufficient increase of material 
nearly impossi])le. 

b. LOCATION OF MOST FAVORABLE LANDS. 

So far as time permitted, we have made a careful study of the pro- 
ductivity and other characteristics of the various oil fields in the state. 
As a result we find that by far the largest part of the tei-ritory is so i)oor 
that it could not provide a large increase in production without an enor- 
mous expenditure of material and labor. We have therefore limited 
our consideration in this instance to ten tracts, which aj)pear to include 
nearly all of the better lands available in the state. In this connection 
we have taken account not only of the daily production to be expected 
from new wells, but also the amount of material required per well, the 
length of time in drilling, the likelihood of water trouble and other 
special difficulties, the gas pressure and other factors involved. 

There is great diversity among oil tields in the matter of the pro- 
ductivity of their wells. In some, the average yield is less than one 
barrel per day, while in others it may amount to tens of thousands of 
barrels per day. For the California fields these facts are shown in the 
diagram (Plate XIV). As a rule, wells which must be pumped rarely 
give 500 barrels per day ; and the average for such wells, in the state 
of California, is less than 30 barrels per day. By far the most pro- 
ductive fields are those which contain strongly flowing or "gusher" 
wells. Thus the famous "Corona No. 5" gusher near Panueo, ]\Iexico, 
produced oil for several months at a rate greater than all of the wells 
(over 1,400) in the most productive of the California fields (tlie ^Midway 
field) conduned. The "Lakeview" gusher in the Sunset field had an 
initial production per day almost ecpial to the present yield of the entire 
Coalinga district with its 900 or more wells. Gushers and flowing wells 
in general, being due to gas pressure, are characteristic of the early life 
of certain fields or parts of fields, but are entirely absent from other 
fields. On land where several wells have already been drilled, it is 
tlicrefore not difficult to ])redict whether succeeding wells in tlie same 



128 REPORT OP COMMITTEE OK PETROLEUM. 

viciniiy are likely lo How fr(M>l.\ oi' will require pumping. Of eonrse 
exceptions occur. 

Evidently a large increase in production is best obtained by drilling 
on land tbat has been provfHl to be gusher, or at least flowing well, 
territoiy. 

All the data at our command indicate that the Buena Vista Hills (in 
the ^lidway field) include the best of the proven territory in the state. 
The wells are of moderate depth, drilling is comparatively easy, and 
wells can be finished in from sixty to ninet}' days. Since the gas 
pressure is still compartively high in a large part of the field, there are 
many flowing wells, whereas most wells in other districts must be 
junnped. 

The Coyote Hills and La Merced fields, east of Los Angeles, equal or 
exceed the Buena Vista Hills in average daily productivity of the wells. 
They are, however, less favorable for several reasons. There is but 
little gas in the La IMerced field, and after the first fews days the wells 
have to be pumped. Even in the Coyote Hills field hardly more than 
half the wells flow. Furthermore, in the Coyote Hills the wells average 
more than a thousand feet deeper than in the Buena Vista Hills, and in 
the La Merced tract only a fraction of one square mile has been proven 
to be productive. Both fields are greatly handicapped at present by 
insufficiency of railroad and steamer transportation for their products. 
N'evertheless, these are easily the second best fields in the state and are 
pi'obably the only ones to rival the Buena Vista Hills. 

In the Sunset field there is an area of something more than two scpuire 
miles forming part of the so-called ''Sunset Flat," in which many of the 
wells are fair producers and some of them flow. In previous years 
several strong gushers have given prominence to this part of the field. 
Although part of this tract is already thoroughly drilled, there is much 
land still vacant. Drilling on these lands is certain to provide wells 
which will pump two to four hundred barrels a day and there is a fair 
chance that some of them will flow. In this locality there are several 
liil sands, and many of the poorer wells have reached only the upper 
licds. The lower sands in most parts of the tract give much larger 
yields. A serious handicap in this field is the deficiency of water supply 
for drilling any more wells at a time than are now being drilled. 

In the East Side field of the Coalinga district there are undrilled lands 
of much larger extent and on the whole rather higher productivity. On 
the average, however, the wells are somewhat deeper. Some of them 
How — a few of them vigorously — and others require mere agitation by 
tlie pump. Operations in this field are at times seriously hampered and 
curtailed by the difficulty of obtaining water for the drilling operations. 
In certain localities water has invaded the sands and is not vet under 



12!) 



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I are about 

—J 'raetieally 

^-;^oom 150 to 

2,000 feet 

t and the 

he state — 

the fields 

uncertain 

by much 

. so heavy 

i through 

tillates to 

itillates is 

irrels per 

is almost 

e market. 

i the war 

)ed, there 
Whittier 
e or more 
ig results 
In most 
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FUTURE PRODUCTION — MAINTENANCE AND INCREASE. 129 

control. In one section choking of the wells by paraffine adds a diffi- 
culty rare in California fields. On the whole, it is a field full of per- 
plexities for the drilling manager and demands the highest skill and 
intelligence for continuous success. As in the Sunset Flat, here there 
are several oil sands, and in many places it is bad policy to drill on into 
the lower and more prolific sands before exhausting the poorer but still 
productive upper zone. So far as casing is concerned this field requires, 
under skilled management, less than the average, although not all the 
operators are as economical as they might be. 

Near the head of the Coalinga syncline there is a small area worth 
considering. One of the wells has given as much as 700 barrels per 
day. On one side, however, the oil sand has been invaded by water. 
In any event only a few good wells could be drilled here. 

There is another tract of perhaps 400 acres just northwest of the town 
of Coalinga, in the West Side field. In general, it is about on a par 
with the average of the East Side field, although perhaps a little less 
prolific. No flowing wells are to be expected. 

In the Santa Maria district, including the Casmalia, Santa Maria and 
Cat Canyon fields, there are areas in which the individual wells are about 
as good as those in the last two or three fields mentioned. Practically 
all of them have to be pumped, but the better wells yield from 150 to 
700 barrels per day. While a few of the wells are less than 2,000 feet 
deep, most of them are much deeper (3,000 to 4,000 feet) and the 
operators are using more casing than in most other fields in the state — 
five or even six strings in many cases. Some parts of the fields 
(Casmalia) are badly involved in water troubles. Owing to uncertain 
and variable conditions, prospecting is slow and is attended by much 
difficultly. Furthermore, much of oil in the Casmalia field is so heavy 
(heavier than water) and viscous that it can not be pumped through 
the pipe lines until it has first been mixed with lighter distillates to 
render it more fluid; and the available quantity of such distillates is 
now insufficient to take care of more than 6,000-7,000 barrels per 
day. Added to this is the further difficulty that the product is almost 
solely dependent upon steamer transportation to reach the market. 
This fact alone may disqualify the entire district, so far as the war 
OHiergency is concerned. 

In addition to the fields which have already been described, there 
are very small parcels of undrilled land in the Belridge and Whittier 
fields, and perhaps in the Lost Hills field, in each of w^hich one or more 
wells might be drilled with a reasonable expectation of getting results 
at least as good as in some of the other preferred lands. In most 
cases, however, there is considerable uncertainty, and altogether the 
undrilled acreage is so small that we have felt justified in omitting it 
from our calculations. 
0—3140)9 



I'M) UKl'OR'l" OP COMMITTER OX PETROI.F.rM. 

The fact has been stated ahove that the proiiiK-tioii of the state can 
be inaiiitaiiied for more tlian a few years only l)y the deveh)pnient of 
entirely new lieUls. We have therefore inquired into tlie question of 
finding sueli new territory. Geoh)gieal conditions more or less favor- 
able to the existence of oil deposits have been found in the Elk Hills 
(Naval Eeserve No. 1), in the Kettleman Hills (Fresno and Kings 
counties), in the vicinity of San Diego, and in some other parts of 
the state. None of these areas have, however, produced oil in com- 
mercial quantities, although wells have been drilled in all of them. 
They nnist still be regarded therefore as lands of unknown possibilities. 
California, in general, has been so thoroughly prospected for oil in the 
last few years that the best informed geologists entertain but little 
hope of discovering large new fields. 

In view of the pr(\sent scarcity of drilling materials aud the urgciii 
necessity of getting an innneiliate inci'ease, it would seem that the 
exploration of these areas should be jiostpcuied until conditions are ukut 
nearly normal in this country. 

c. AVA1LABII.it V OV THE BEST LANDS. 

The preceding pages deal largely with fact.s. but we now come 1" 
several subjects which are involved in nnich uncertainty. 

As already explained in Chapter HI, a large part of the best oii 
lands in the state are now withheld from development by federal suits. 
The map (Plate VII) shows the exact number and distribution of these 
lands now wholly or partly unavailable. It will be seen that thes 
include nearly all the lands in the Ruena Vista Hills and the Sunset 
field, and about half of those in the Coalinga district. Yet these are 
almost the only lands in the San Joaquin Valley which are capable ol' 
yielding a large increase in production. It is our unqualified opinion 
that until these lands are in some way opened to rapid drilling, and foi' 
several months thereafter, a great increase in oil production can not 
be obtained from the valley fields. Table 26 shows separately the 
estimated undrilled acreage of the immediately available, as comimred 
with the withdrawn lands in the five best districts. 

If we are right in estimating that approximately 57 per cent of the 
acreage and 74 per cent of the well locations on these lands Avill be 
unavailable for drilling until some kind of decisive action is taken b.\ 
tlie courts or the federal government, then the estimates of possible 
increase in production, wliich are given in Table 27. must be reduce. I 
accordingly. Such a reduction brings the figures for that gross increase 
far below the estinuited minimum requirement of 55,000 barrels per da.\ . 

(7. CONDITIONS IN NAVAL RESERVE NO. 2. 

Although the committee is reluctant to enter into any diseu.ssion ol' 
this subject, in view of tlie present controversv regarding it. we feel j. 

1 



FUTURK PRODUCTION — MAINTENANCK AND INCREASK 



i;n 



Totuls 

Santa Maria, etc, 
Not In suit - - 

Coyote-Merced — 
Not In suit -- 

jToUils 

I Not in suit.. 



K. T. & 0. 

I suits 



3 Not in suit 



K. T. & 0. 

suits 



•^ Not In suit. 



g j Other suits 



K. T. &. O. 

suits 



^s 



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ss 



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REPORT OF COMMITTEE ON PETROI.EIIM. 






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FUTURE PRODUCTION — MAINTENANCE AND INCREASE. 1:^:} 

coiiipelled to do so, because it is vital to the problem now faeinj^ us. 
We do not, liowever, attempt to discuss the questions of policy and 
justice that liave ])een raised hy others. 

Petroleum in the <i;round differs from coal and other )nineral deposits 
in being mobile. It migrates underground in response to pressure and 
always in the direction of least pressure. The pressure is either hydro- 
static, or is due to the expansive force of compressed gas, which may be 
dissolved in the oil, or separate from it, or both. The ability of the 
liquid to migrate in response to pre.'^sure depends chiefly on its own 
^ iscosity and the porosity of the rock through which it moves. 

In general, heavy oils (10' Baume) are so tar-like that they migrate 
very litth' unless the tenq)erature is high ; whereas, light oils (30'' to 55'' 
Bauuie) pass through rock as readil}' as water, or more so. The oils of 
tlie ten fields which have been selected for special consideration in this 
iii.stance vaiy from 10° to 35" Baume, with an average of a])out 23° 
Baume, and are. therefore, mostly intermediate as regards their viscosity. 

The rocks inclosing the oil in the California districts vary from clays, 
in wliicli tlie pores are so small that liquids are held in them almost 
without movement, through sands of various degrees of coarseness, up 
to gravel beds and brittle rocks which have been fractured and, there- 
fore, contain many cracks that serve as avenues of movement. The 
actual production of oil is almost entirely from the sands, gravels and 
fractured rocks, through which alone the oil can move at an appreciable 
rate. It is obvious, therefore, that large differences in the rate of move- 
ment of oil underground are to be expected, not only among different 
fields, but also in the same field. 

When a liole is drilled into a body of sand or gravel tightly filled with 
(.il, one of three things will happen. (1) The liquid will rise in the 
tube until the height of the column thus formed equals the pressure in 
the reservoir. (2) If conditions are such that there is no gas pressure, 
and but little hydrostatic head, the liquid will ri.se only a few feet in the 
well and must be pumped out. (3) If the hydrostatic head is large, the 
oil will rise much higher, and may even flow quietly out at the top. If 
the reservoir contains not only liquid, but also ga.s, confined under 
pressure, the gas may force the oil to the surface with a strong flow, 
and in some well-known cases has even burst forth with sufficient 
violence to wreck the derrick. These may be considered as forming a 
fourth category. 

The first of the^:e conditions is characteristic of the Kern River field ; 
the second is found in varying degrees in most of the California fields. 
The third is not common, but the fourth exists in the Buena Vista 
Hills, the Coyote Hills, certain parts of the East Coalinga field and the 
Sunset Plat, and in a few other small areas. 



J;y KKl'OKI' OK fOMMITTEK ON PETROLEUiM. 

ill llic iH'st pai't of Naval Koserve No. 2 the gas pressure is relatively 1 
stroiiKi l>»it it must be evident tliat, as the y,as eontinues to flow out from 
the numerous wells already drilled, the gas pressure in eaeh individual 
layer of sand, often called a "reservoir," is bound to decrease. For 
lypieal individual wells, this decline is shown by the pressure curve in 
Plate XXXVIT. That it affects likewise the field as a whole is proven 
by the fact that the total yield of gas from the naval reserve is now 
falling off. j 

Since it is the gas pressure which causes the wells to flow in large 
volum(\ it is also clear that the production of wells, both existent and 
fului'c. within the naval i-eserve, must decrease progressively, except 
in so far as there may he subsidiary anticliiml folds or additional 
layers of sand which have not bccMi penetrated by wells. There is some 
reason to think that excei)tions of tiiis character exist, but it is tol- 
erably well established that they are not of major conse(iuence in the 
reserve. 

On account of the relatively slow movement of oil, even in sand beds, 
the draft of liquid into a given well is strongest in the immediate 
vicinity of the latter, and ^ decreases in all directions, except as 
influenced by variable porosity and other factors. It is to be expected 
that when wells are subsequently drilled in the vicinity of the first one, 
they will have some influence on the amount of oil and gas flowing 
to the latter. That this is not merely an academic theory, as some 
l)eople profess to think, is indicated by the histories of many wells 
i-eported to the committee from different localities. A few of these 
examples should suffice to indicate the truth of the statement. 

The curves on Plate XXXVIII, which are reproduced through the 
courtesy of one of the companies operating in the naval reserve, show 
clearly how the flow of the old well decreased as soon as the new well 
began flowing at a distance of 930 feet from it. 

The performance of two wells in the west side field of the Coalinga 
District is shown by the curves in Plate XXXtX. In this case the first 
well had been producing for seven months, by the time the second well 
was brought in. and had established the usual regular curve of decline. 
The.S(^ wells stand about '^y^O feet apart. 

Somt> critics have stated the opinion that such influences are of very 
small lateral extent. In this connection, we cite the following case 
taken from near the center of the Buena Vista Hills anticline. A well 
that had been flowing vigorously for several months, stopped suddenly 
on the day that a "gusher" well was brought in at a distance of 1,850 
feet. Effects at even greater dislauces hnxe been reported from the ] 
Midway field. 

In view of the rather low viscosity of the oils au the reserve and 
the gas pressure exerted npon them, it is reasonable to expect such 








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FUTURE PRODUCTION — MAINTENANCE AND INCREASE. 135 

sympathetic relations between wells to be stronger there than in most 

fields. 

In setting aside Naval Reserve Number 2, it is said to have been the 
government's intention to keep a large supply of oil for the use of 
the Nav3^ in future decades. In a closed anticlinal structure, not pene- 
trated by wells, such a reserve would doubtless be essentially perma- 
nent. This seems to be practically true of Naval Reserve Number 1 
in the Elk Hills. In the heart of Naval Reserve Number 2, however, 
tliere are patented lands, which have been intensively drilled, and 
others on which drilling is in progress, for reasons which need not be 
detailed here. There is reasonable ground for doubt that these wells 
.'ould ever draAv out all the available supply of oil from the reserve. 
That would depend on the number, shape and distribution of individual 
oil-bearing sands, and, perhaps, on other factors. In any case, it would 
take twenty years or more to effect the depletion fully. There is scarcely 
room for doubt, however, that very large quantities of oil have been, 
are being, and will be withdrawn from the reserve by these wells. The 
United States Geological Survey is quoted as estimating that at least 
20 per cent of the oil Mali be so extracted, even if certain precautions 
are taken by the government. Furthermore, owing to exhaustion of 
the gas, which supplies the very force that makes this a region of 
liighly productive flowing wells, it is far within the bounds of proba- 
l)ility that Naval Reserve Number 2 will become, in time, an area of 
l)umping wells of relatively low productivity, like the western portion 
of the Midway field. Then the remaining oil will be extracted at 
greater expense, and much more slowly than today. 

Hon. Franklin D. Roosevelt, Assistant Secretary of the Navy, has 
suggested (article in "Petroleum Age," November, 1916) a plan to 
keep the reserve intact. He sa^'s: "We * * * must not allow private 
concerns to take out oil from any portion inside of the outer limits of 
such a reserve. Any child knows that oil flows to a greater or less 
extent over large areas underground, and government oil lands must be 
al)solutely and definitely protected against tapping from other sources." 
This would seem to imply that the federal government should exercise 
its right of eminent domain and buy back most of the lands which have 
been patented within the reserve, cap or cement the existing wells, and 
thus completely stop production Avithin the reserve until the oil is 
wanted. 

Unfortunately even this revolutionary step would be impractical, 
unless the government wished to throw away the millions of dollars of 
investment, represented by the existing wells, by completely cementing 
tlie holes so far as they pass through the oil-bearing zone. If this 
precaution were not taken, and the wells were merely capped at the 
top, there would be danger of admitting water to the oil sands, through 



18(i REPORT OF COMMITTEE OX PETROLEUM. 

t)u' nisting out of easing, and also of permitting- the eseape of gas to 
llie snrfaee. These dangers have been pointed out by Mr. C. Naraniore 
in liis testimony (June 23, 1017), before the United States Senate 
Committee on Public Lands. At that time he voieed the opinion that 
the best thing the government eonld do to protect the reserve would be 
to buy the patented lands, including those within the reserve belonging 
to the Southern Pacitic Company, in ease the company wins its suit, 
"and then work the wells that are already drilled, at their minimum 
economic jiroduetion, and have competent men in charge, so that if 
anything should go wrong witli any of the wells, tlioy would lie able to 
repair the wells." 

We think that Mr. Naramore has stated a fact in saying that Naval 
Reserve Number 2 is "valuable for present storage, but as matter of 
permanent storage, it is a thing of the past." 

c. TRUI^KNT DISTRIBUTION OF DRILLING 

After the best available lands for drilling have been selected, it wouKl 
not be wise to drill them all at once in solid blocks, even if the necessary 
materials and crews could be obtained. Such a course is ordinarily 
advisable only in certain small areas that are unusually well known 
geologically. On the contrary, it tends to insure against failure if the 
wells are drilled in lines, one at a time. By this process the operatoi-s 
can feel their way, as it were, and mark out the limits of the pro- 
ductive territory with the minimum loss through putting down dry 
holes. They can also get invaluable information regarding the position 
of water-bearing layers, so that they may know just where such water 
ought to be shut off. In some districts it is practicable to drill only a 
few wells at a time, because the supply of water for drilling purposes 
is adequate. This is true in some parts of the Coalinga and Sunset 
fields. 

The importance of this matter will be readily understood, for if only 
four or five, or even eight or ten wells are to be drilled in each section 
of land at one time, it will require a larger acreage in order to drill, say 
100 wells, in a given number of months, than would otherwise be 
necessary. There are probably certain sections in California that 
would alone yield all the increase now necessary if they were entirely 
drilled up at once, but for the reasons indicated, it would be a dangerous 
plan to pursue. 

This need of large acreage means either that many companies must 
be engaged in the operation at once, or that a few companies must 
operate on large holdings. It has been proposed, in connection with 
Inlls pending before congress, to restrict the size of leases on withdrawn 
government oil lands to even a single square mile. If such a policy is 
adopted, it will tend to put the development of petroleum lands out of 
the hands of those companies most etficient in handling the business. 



FUTURE PRODUCTION — MAINTENANCE AND INCREASE. \'-il 

4. Transportation Facilities. 

It is an unfortunate fact that some good oil producing territory in 
California is without adequate transpcn-tation facilities. As long as 
; that condition remains, an increa.se of production in such areas would 
I serve no useful purpose. 

In the San Joaquin Valley pipe lines which have ample capacity to 
tran.sport all the oil which the fields in that part of the state can be 
expected to produce in the near future are already available. The dis- 
tribution and ownership of these pipe lines are shown on Plate VI. As 
previously indicated, some readjustments and arrangements could well 
be made so as to eliminate a substantial part of the railroad trans- 
portation of oil that now takes place. x\ considerable number of cars 
could then be freed for service in regions which aie not served ade- 
(luately by pipe lines. 

In the .'southern California fields the situation is quite different. At 
])resent tlie output of the wells in Los Angeles, Orange and Ventura 
counties, as Mell as those in the Santa Maria region, is either piped to 
the coast or transported eastward by rail. That whieh goes to the coast 
is shipped, either after or without refining, by tank steamers to various 
points along the Pacific coast of America and to countries farther we.st. 
At present all of the marketing companies report a great shortage in 
both tank steamers and tank cars, but especially in the latter. For 
example, at the El Segundo refinery, on June 15, 1917, the company was 
short more than 3,500 tank cars, or over one month's normal supply. 
They were loading at that time on an average of 30 to 40 cars per day, 
although the maximum capacity of their loading equipment is more 
than 250 cars per day. The company is using all of its present storage 
facilities, and is continually building more tanks, and yet it is not able 
to fully keep pace with the production of the tributary wells east of 
Los Angeles. For this reason it has been found necessary- to reduce the 
flow of some of the wells until the means of transportation can be 
increased. 

The General Petroleum Corporation has a pipe line from the ^lidway 
district south to San Pedro and Los Angeles. If the pumps on this line 
should be rearranged so as to carry the oil northward instead of south- 
ward, as at present, and if the company could be induced to make this 
readjustment, it would be possible to take care of the present and much 
of the future increase of production of the southern fields so far as the 
market in California alone is concerned. Even in that event, however, the 
acute shortage of oil in southeastern California, Nevada and Arizona, 
and particularly in the great copper mining districts of the latter state, 
would remain unrelieved. That region can apparently be se^•^^ed only 
l)v a sn])stantial increase in the number of tank cars available. 



l;^S KKi'OKT OF COMMITTEE ON PETKOLETM. 

TIk' above considerations show tli;it iniless the necessary cars and 
•ships can be supplied no amonnt of increase in production in the south- 
ern lields Avill be of any practical value to tlie state or nation in the 
present emergency. In that ease we should be obliged to look to the 
San Joacjuin Valley fields for all of the necessary increase. It is of 
the utmost importance to bear this fact in mind in considering our 
estimates of possible increase in production, a.s given later in this 
chapter. 

5. Operators. 

In view of the growing scarcity of oil, and the important place it holds 
in the nation's economy, it is the obvious duty of the oil producer to 
extract the maximum amount of oil from his land with the minimum 
damage to the surrounding lands. To accomplish this to the fullest 
degree, requires not only business ability and skill, but thoroughly 
scientific handling of the work. 

In the past, great damage has been done to the oil fields of the state 
through the ignorance and incapacity of certain operators. By allowing 
gas to flow out unchecked, the pressure, wdiich causes wells to flow, has 
been greatly decreased. By allowing wells to become choked with sand, 
particularly when first brought in, many good wells have been ruined 
or have required expensive redrilling. Most serious of all, water has 
been allowed to invade the oil sands and to create widespread damage in 
certain areas. Of course, it should be said in partial defense of these 
companies, that some years ago the conditions and their remedies 
were not understood as well as they are now, and hence mistake^s were 
unavoidable. Fortunately, the state of California has now empowered 
the State ]Mining Bureau not only to investigate these facts, but to 
compel the observance of proper precautions, especially against water. 
Had this been done ten or tw-enty years ago it would probably 
have saved the state many millions of barrels of oil now irreparably 
lost; Avould have saved the companies themselves many thousands of 
dollars, and would have made it much easier to conserve the oil that 
still remains. 

There are certain companies operating in the California (,)il fields 
which present a welcoDie contrast in this respect. By employing 
si)ecially trained geologists and engineers to keep accurate records, and 
1o advise regarding procedure in drilling, they are able to remedy water 
li-oubles effectually, to detect oil sands that might otherwise be over- 
looked and lost, and to greatly reduce the proportion of failures in drill- 
ing. They have adopted tlie most up-to-date methods of drilling, the 
use of specially designc d screen-casing to prevent the sanding up of 
wells in gusher territory, and are conliimally incr(\nsing their efficiency 
iis new ideas are developed. 



FUTURE PRODUCTION — MAINTENANCE AND INCREASE. 189 

It is a fact, which must be noted, that these companies are enabled to 
carry on the work with a high degree of efficiency, partly because of 
their size and ample resources. A company with large land holdings, 
especially if the lands are concentrated, can plan a consistent and intelli- 
gent drilling campaign, that would be impossible with a large number 
of small companies without that closeness of cooperation which is almost 
unattainable. They are also able to exhaust the oil sands one at a 
time, beginning with the uppermost, without being forced by competitors 
to drill into deeper sands at once in order to protect themselves. They 
are, furthermore, able to employ permanently men of the highest ability 
nnd sldll, and enable them to become thoroughly acquainted with their 
l)r()perties. It is obvious, also, that they can effect economies in manage- 
ment, the purchasing of supplies and the disposal of the products. The 
leply that some of these companies have not always passed these 
(M-onomies, or a reasonable share of them, along to the public or back to 
the small producer has nothing to do with the present question. That 
is something which can and should be regulated by some form of govern- 
ment intervention, if no other means is adecjuate. 

We think the facts which have been presented are sufficient to 
indicate that it would be of especial advantage to the country, at this 
crisis, to have the new drilling campaign carried on as far as possible by 
those companies which have developed the most efficient in-actices. 

6. Capital. 

Tile larger opei'ating companies appear to have ample cai)ital at tlieir 
command to continue, and also to greatly increase, production, even 
ill the face of greatly increased cost of materials. On the other hand, 
some of the smaller companies report that, at present prices for oil and 
drilling supplies, they can not afford to drill new wells. This is 
particularly true of those whose lands are in territory that is only 
moderately productive. Furthermore, many of the operating com- 
panies, whose lands are involved in federal suits, have a large part of 
their resources tied up because the proceeds from their wells are being 
deposited in escrow, pending the settlement of the litigation. 

Viewing the state as a whole, however, we conclude that the 
deficiencies of capital are not of serious consequence, from the point of 
view of the nation, although they are obviously of painful imi)ortance 
to individual companies. 

7. Incentive. 

With oil selling at the wells for substantially $1.00 per barrel or more, 
it would seem that there is sufficient incentive for a very active drilling 
campaign throughout the state. In addition, some of the larger com- 
panies have pressing needs for oil, and are thus compelled to drill. We 



141) REPORT OF COMMITTEE ON PETROLEUM. 

are also assured that a feeling of obligation to assist the nation in 
increasing the petroleum supply in war time is a faetor of considerable 
importance just now. 

On the other hand, many of the smaller companies, having long time 
contracts for the sale of oil at less than 50 cents per barrel, are not 
benefited by the rise in price, and are, therefore, hindered from taking 
up new drilling plans. 

However, there appears to be ample incentive for the larger producing 
companies, which we estimate would, by themselves, be able to supply 
the increase needed, if other conditions were favorable. 

From the above survey of the factors involved, we conclude that an 
important increase in production can be ol)tained in the shortest 
time by drilling many wells on land where the oil sands are at 
moderate depths, -where general conditions of drilling and production 
ai'c favorable, where flowing wells may be expected, and where ready 
transportation is available. 

IV. Possibililics of t'<(cuyiii(i llir Required Increase. 

1. Amount. 

There is plenty of oil in the ground, not only for the present war 
emergency but also for several years nu)re. Our inunediate problem is. 
therefore, not one of reserve supply but of making the supply available 
under the hindering conditions which now exist. 

An examination of Plate XXXIV will reveal the number of new wells 
of various productivities that would yield the requisite increase in one 
year if they were all drilled at the beginning of the year. In actual 
practice the drilling would of course be spread over at least several 
months and hence the number required Avould be somewhat greater. 
From the nature of the diagram, it becomes obvious that wells which 
yield but a few barrels per day must be left entirely out of consideration, 
for, under the best circumstances, hardly more than 1,500 new wells 
could be drilled in California during the next year and the actual 
number may not reach even half that. 

In order to make an accurate prediction of the increase in oil outpnt 
that is possible, under existing conditions, it would be necessary for the 
committee to be possessed of snperhuman knowledge of the interaction 
of several variable factors. Under these circumstances it is necessary 
for us to make certain assumptions, to generalize from average quanti- 
ties obtained from the various reports at our disposal, and then to mak*^ 
certain necessary allowances and corrections. It will be obvious that at 
best there is rather large room for error at many points. There will be 
some tendency, however, for these errors to equalize each other. 

The following method has been pursued: we first classified the lands 



FUTURE PRODUCTION — MAINTENANCE AND INCREASE. 141 

iu the various oil fields with reference to their ability to yield a large 
quantity of oil in 12 to 18 months with a moderate expenditure of 
material and labor. Lauds which seemed likely to average less than 
100 barrels per well per day during the first year were omitted, for the 
reasons given above. The necessary facts about individual wells were 
furnished by the various producing companies and by the State Oil and 
Gas Supervisor, Mr. R. P. McLaughlin. 

On the same basis, the better lands were then subdivided into three 
classes. Class "A" includes those likely to give wells of large produc- 
tion with a relatively small outlay of material and in a relatively short 
time. Nearly all of this is flowing well territory^ and occasional gushers 
are possible. Classes "B" and "C" are correspondingly less favorable 
in respect to production, particularly, but also as regards material and 
time. On account of the varying value of the factors, these classes can 
not well be given numerical expressions. 

We then estimated, from the most recent maps of the fields, the 
ninnber of acres as yet undrilled in these parcels of land and the numl)er 
of wells that in wise practice could advantageously be drilled on them. 
The result of this estimate for the diiferent fields is given in Table 26. 

From the foregoing data, we have estimated the expectable production 
of the different tracts of land, as shown in Table 27. Li this connection 
it must be observed that the committee assumed (a) that all necessary 
materials, supplies and water would be available as fast as needed, 
(6) that there would be no shortage in labor, (c) that the lands now- 
withdrawn from development would become available, and (d) that 
those in control of the lands could and would actually cause the drilling 
to be done. At the same time, certain corrections have been applied as 
follows: (a) fifty to one hundred per cent extra time, over the average 
for the district, in order to allow for accidents and unforeseen delays, 
(&) five per cent deduction for failure of that proportion of the wells 
to produce adequately, (c) ten to twenty per cent added to our estimates 
for such materials as casing, rope and so forth, which are very difficult 
to calculate in advance, (d) five per cent deducted to offset the abnormal 
or sympathetic decline of the wells now producing in the same areas, 
that would be caused by drilling new wells adjacent to them. These 

!* corrections are admittedly very rough approximations. 
The committee has deemed it best not to list the lands combined in 
these estimates nor to represent them on a map, as such specific informa- 
tion might later be used for some ulterior purpose by selfishly interested 
1 parties. The information is. however, deposited in the files of the 
\ committee and can be produced whenever a legitimate need arises. 

An inspection of Table 26 reveals a number of general facts. Nearly 
all the ])est undrilled productive territory in California is comprised in 



142 REPORT OF COMMITTEE ON PETROLEUAf. 

;1r' Biiena Vista Hills and tlie Coj'ote Hills. All of the desired prodiie- 
lion inij?ht be obtained from these two fields, or the first alone, within a 
few months time, if the saving of casing; and particularly the economy 
of time should prove to be of critical importance. On the other hand, 
with somewhat more time available and with decided improvement in 
various conditions, it would be possible to obtain all the increase outside 
of the naval reserve. In our judgment, however, it is futile to expect 
an adequate increase from the lands which are at present free from suit, 
for it will be noted that the best of these lands have in general been 
more heavily drilled tlian any others, and a1 the same time they contain 
but a small part of the total acreage. 

2. Time. 

The time necessary for the drilling of the wells varies with a numl)cr 
of different factors. Of these, depth of well is one of the most obvi- 
ous. Another is the use of the rotary as against the standard type of 
drilling tools. As shown in the diagram (Plate XXXVI), more rapid 
drilling is done by the rotary method, but under some circumstances it i> 
advisable to use the standard, on account of the fact that it gives mudi 
more accurate information regarding the formations passed through and 
has some other advantages. 

Efficiency of the drillers and general good management of the coni- 
panj' have much to do with the speed of drilling. It is important to 
have all equipment and supplies furnished promptly and in such a Ava\' 
as to give the minimum of lost time and effort. There is at present 
niucli variation in regard to tliis among the companies. 

Natural conditions affect the drilling operation to a variable degrir 
in different fields. In general, drilling can be carried on most rapidl\ 
in regions where the rocks are relatively soft and uniform but y<t 
stable, and also Avhere serious difficulties with water-bearing sands aic 
not encountered. Where such troubles are found, it is necessarj- that 
the drillers should know exactly what they may be and where to expect 
them. Serious delays are often caused by accidents, the loss of tools, 
collapse of casing and finally by the sanding up of the well after it is 
l)rought in, thus deferi-ing its actual production and in some casts 
even causing its abandonment, with the necessity of drilling it ovci- 
again. 

The present average rate of drilling wells in all California districts 
is shown in Plate XXXV 1. As a matter of fact, there are large 
variations witiiin districts and even within small areas in the same 
disti'ict, depending upon the influence of the factors mentioned above. 

An estimate of the amount of time required to change California's 
l>re.sent stationary or d(M>lining production to an increased production 



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FUTURE PRODUCTION — MAINTENANCE AND INCREASE. 14:^ 

amounting to more than ;)5,()00 l)anx'l.s per day, depends upon the 
effects of many contiicting factors. Field superintendents of two of 
the largest companies operating in California have estimated that it 
would require about one year to produce their share of the increase. 
In making this estimate they took into account their past experience 
and made due allowances for the usual loss of time through various 
causes. We have carefully made independent calculations on this 
point, but on a somewhat different basis (as explained on page 000). 
In order to find out how fast the required increase could possibly l)e 
supplied we assumed a set of conditions that would be ideal; and yet 
they are all possible, at least with sufificient assistance by the federal 
government. 

On this basis we estimate that it would be possible to increase the 
pK^sent daily production by more than 35,000 barrels in from three to 
lour months after the drilling should begin. 

Tt is of the greatest importance, however, to bear in mind that the 
-sumptions which have been made are unduly favorable. Drilling 
iiiaterial is scarce, the supply in sight being conservatively estimated at 
])erhaps enough for 600 average wells. In some areas there is a 
d(^fieiency of water for drilling purposes, and to supply this would 
I'cquire expensive construction of water mains, wells, pump stations, 
etc. Many of the drilling crews in the state are being used on lands 
which are not highly productive. From data furnished by the State 
Oil and Gas Supervisor we have calculated that during recent months 
(January, 1916, to April, 1917), not counting failures, 6S per cent of 
tlic new wells drilled yielded less than 100 barrels, and 40 per cent less 
than 50 barrels, per day. These wells are nearly all profitable to their 
owners, but, in view of the shortage of materials, not to the country. 
Furthermore, we estimate that not more than one-fourth of the crews 
could be obtained for drilling on the lands classified herein as A, B and 
C, unless the federal government should commandeer their services and 
assign them to work upon those lands. This condition is due to the 
pressing business needs of many companies and to clauses in many lease 
contracts demanding the drilling of new wells at specified times. About 
three-quarters of the lands in question are now either partly or wholly 
closed to drilling on account of litigation, and this ratio is much higher 
in the San Joaquin Valley, from wliich, on account of transportation 
difificulties elsewhere, it may be found necessary to ol)tain all of th(> 
increase. 

For these reasons we conclude that the estimates made by the engi- 
neers, above mentioned, that at least a year will be required to bring 
about the necessary results, are much nearer to the actual attainments 
we may expect. Nevertheless, any relief from the conditions now 



■14-1 REPORT OF COMMITTEE ON PETROLEUM. 

tending to restrict the development of the oil fields should operate t^ 
shorten the time materially in the direction of our idealized estimate. 

Tlu! relative importance of the factor of time, as compared with thai 
(f material supplies, depends largely upon how soon the increase i>- 
I'oquired. If the increase must be ready in six months, or even by thf 
end of 1917, then time is the critical factor. If the limit can be 
extended to July, 1918, as we think it can, then materials and trans- 
l)ortation facilities are of greater moment, and hence speed of drilling 
•should be sacrificed to economies in material and ships. In either case 
only very good lands will suffice. Considering the time which will 
necessarily be lost in making the various arrangements and readjust- 
ments before the work is actually brought into full swing, we conclude 
that, even so, the present rate of bringing in the new wells will need to 
1)0 increased in order to meet the needs of the case. i 

V. Sumniarii. 
1. Most Favorable Lands. 

If the entire state is considered without any reference to lands which 
are in litigation or have been withdrawn from development, and with- 
out reference to transportation facilities available for bringing the oil 
to points of utilization, w'e conclude that the best lands are in tlie 
following fields, in the order of their probable productivity per unit of 
material, labor and time : 

(a) Buena Vista Hills (Naval Reserve No. 2). 
(&) Coyote Hills. 

(c) La Merced (Montebello). 

(d) East Coalinga. 

(e) Sunset Flat. 

(/) West Coalinga and Syncline. 
(g) Santa Maria. 

Other good lands that are less favorable from the point of view of 1 
l)i-oduction per well, economy of materials and time, exist in the fields i 
above mentioned and also in some others. We estimate that all thesi' 
lands combined are capable of furnishing very much more than the 
desired 55,000 barrels per day additional production, provided supplies, 
labor and transportation can be furnished, lender similar conditions 
the required increase could be obtained in much less than one year, 
probably in four months, from the beginning of the intensive drilling. 

In view of the desire of the Navy Department to preserve as far as 
])ossible the oil in the naval reserves, Ave have made .separate estimates 
with reference to the lands outside of the reserves. As a result we 
Ijclieve that under the most favorable circumstances about 65,000 
barrels per day increase could be obtained outside of the reserves. Of 



145 

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FUTURE PRODUCTION — MAINTENANCE AND INCREASE. 145 

this amoiiut nearly one-half would have to be drawn from the southern 
and coast districts, which are at present not supplied with adequate 
transportation facilities. We are of the opinion that scarcely three- 
fifths of the necessary increase could be obtained from lands outside 
the naval reserves in the San Joaquin Valley, where alone these facilities 
are now available. 

2. Agencies of Production. 

It is, of course, obvious that drilling on the lands not in suit must 
be done by the owners of the land or under their supervision, unless the 
government takes some action that would be revolutionary in its nature. 
We think it has been amply demonstrated that the development is 
likely to be carried on most effectively by those companies which have 
already acquired the necessary experience and detailed understanding 
of local conditions and have shown conspicuous ability in the manage- 
31 lent of their properties. By far the greatest part of the lands above 
mentioned are already either oMued or claimed by companies of which 
this may be said. We do not presume to discuss any of the complicated 
questions regarding the legal status of claimants to these lands or 
matters of justire and ethics involved in the existing disputes. We 
urge, however, that an equitable settlement of these important questions 
be reached as soon as practicable. 

3. Necessary Arrangements to Be Made. 
We are convinced that without the following arrangements which in 
nearly all cases can be made only by or with the help of the federal 
government, it will be impossible to obtain the required increase in 
production or perhaps even to maintain the present production. It is 
absolutely essential, first, that a large .part of the valuable lands now 
withheld from development be made available as quickly as possible ; 
second, that adequate supplies of material be made available as fast as 
required, and third, that most of the workmen be retained in the oil 
fields. Unless the very best lands are used it will also be necessary to 
supply additional tank steamers, and, in any event, it will be necessary 
to increase the rate of delivery of tank cars. It is also possible that 
sufficient activity can not be stimulated without some form of govern- 
mental inducement or compulsion, directed by a commission or other 
suitable agency. 



10—31469 



1 



CHAPTER XI. 

CONSERVATION. 

As horeinl)efore indicated, two possible means of meeting the 
shortaji^e in California petroleum have occurred to us — first, increased 
production and, second, decreased consumption. In (^liapter X we 
considered the first of tiiese alternatives. In the present chapter we 
shall consider the second. 

We shall addre.s.s ourselves herein to the pos.sibility of conserving' 
California petroleum after it has reached the surface of the ground. 

The word "conservation" will be used in this chapter in a l)i'oad 
sense tt) include the diminution of field losses, the liigher use of petro- 
leum and its products, and the substitution of other fuel or power. 

The subject will be considered with reference 1>oth to the emerf?ency 
created by the war and to the more normal conditions which should pre- 
vail after the termination of the war. 

The subject matter of this cliai)ter will be considered undcM* the 
following heads : 

1. Diminution of field los-.es. 

11. Higher use of petroleum and pi-oducts. 

HI. Substitution of other fuel or i)o\v(m- for (California fuel oil. 

TV. Coiu'lusion. 

I. Din) ill II I ion of Field Losses. 

'J'he consei'vation of California petroleum through the diminution of 
field losses is a matter which has received and is receiving serious con- 
sideration in the oil fields of California. 

The principal losses in the field may be classified as follows : 

1. Losses incidental to the bringing-in of high pressure wells. 

2. Lo.s.ses from seepage, evaporation and drainage. 
;5. Losses due to inefficient field use. 

1. Losses Incidental to the Bringing-in of High Pressure Wells. 

Between the time when a iiigh pressure oil well is "brought in" and 
the time when it is brought under control, some loss of oil in many 
c;ises occurs in any high pressure territory. AVhere drilling is carried 
I'll by competent men who understand the characteri.stics of the district 
in which they are operating, losses due to uncontrolled wells are very 
small and do not constitute an important factor in the problem of con- 
servation. At the present time these losses in the ('alifornia oil fields 
may be disregarded. 



148 REPORT OF COMMITTEE ON PETROLEUM. 

2. Losses From Seepage, Evaporation and Drainage. 
Seepage, evaporation and drainage losses are dejiendent largely upoji 
the gravity of the oil and upon the care which is exercised to prevent 
waste. During any period of low priees, losses from sumps, tanks and 
storage reservoirs may become quite large due to lack of care on the part 
of field operators and because at such times the movement of oil from 
well to pipe line may be slow by reason of excess production. At the 
present time, however, when storage is rapidly becoming depleted and 
the oil movement from the well to pipe line is accomplished with as little 
delay as possible, these losses have been reduced to a negligible amount. 

3. Losses Due to Inefficient Field Use. 

Approximately 8,500 ban-els of marketable oil are used daily in the 
California oil fields for pumping and other well operations. While we 
do not wish to be understood as indicating that all field uses of petro- 
leum are unnecessary, it is apparent after careful investigation that 
further economy can be and should be practiced by field operators. 

During the early years of petroleimi development in California, a 
very large amount of fuel oil was burned under the boilers of small and 
unnecessarily inefficient steam boilers, and this condition continued 
during the period of overproduction and low prices. During the last 
two or three years, however, central steam plants have replaced to a 
large extent the individual pumping stations theretofore relied upon 
for power in those fields where natural gas is not available in sutificient 
ffuantities to meet the power requirements. 

In the gas producing fields of the state individual gas engines have 
largely replaced steam power and in certain districts, particularly in 
Coalinga and Kern River fields, electric power for Held pumping is 
being rapidly substituted. 

Electric motors amounting to a total of between 6,000 and 7,000 horse- 
power are now in use in the San Joaquin Valley oil fields for pumping 
and cleaning wells. These installations at present effect a saving of 
not less than 14,000 barrels of crude petroleum per month. The 
number of electric motor installations for oil well operations is rapidl\' 
increasing, due partly to the present high price of oil and partly to the 
general policy of conservation which has l)een adopted by most of the 
large operators. 

It is not unreasonable to expect that, through the use of electric 
motors, gas engines and larger and more efficient steam plants, the field 
uses of petroleum Avill be reduced to possibly half of the present uses. 

These are considerations, however, largely for the future. Relief 
will come largely from the use of new equipment in the operation of new 
wells. The difficulty in obtaining motors, gas engines and steam boilers 
(luring the present emergency Avill force, for a time at least, a partial 



CONSERVATION. l-i9 

continuation of obsolete and wasteful methods in connection Avitli exist- 
iiio; installations, in order that new equipment may be devoted to new 
wells brought in under the campaign of intensive drilling which will be 
necessary in order to maintain production. 

II. Higher Use of Petroleum and Froduets. 
We have given careful consideration to the possibility of cou.serving 
California petroleum and its products by the higher use thereof. 
The subject will be considered under the following heads: 

1. Burning of unrefined petroleum. 

2. Improved refining processes. 

3. Internal combustion engines. 

4. Automobiles. 

1. Burning of Unrefined Petroleum. 

It is an economic crime to burn unrefined petroleum. 

Approximately 40 per cent of California petroleum is now used as 
fuel under boilers without having been refined. While a considerable 
])art of the fuel oil burned by California railroads and other industries 
is being refined, it is nevertheless true that very large amounts thereof 
are burned after having had only one cut taken therefrom or without 
any refining or topping Avhatsoever. Tests made in the laboratory of 
the Railroad Commission of California of fuel oil taken from oil tanks 
of various railroads of California, ready for burning by these railroads, 
showed that the oil had a range of gravity up to 21 degrees Baume, and 
that several cuts of distillates and lubricating stocks can be taken 
therefrom. 

Other forms of fuel or pt)wer can in time take the place of fuel oil ; 
l>ut to date there are no satisfactory substitutes for gasoline or lubri- 
cating oils. 

We are strongly of the opinion that as soon as possible steps should 
lie taken, by governmental authority, if necessary, to prevent the further 
burning of unrefined petroleum. 

2. Improved Refining Processes. 

Improved refining proces-es, by wliich by-products in increasing 
amounts are extracted from the crude petroleum, are a high form of 
conservation. 

It is gratifying to note that the California petroleum refineries are 
all working on improved processes of refining and cracking and that 
the percentages of gasoline, lubricants and other valuable products of 
petroleum secured by them from a given amount of crude oil are con- 
stantly increasing. 

This subject is more fully discussed in Chapter Vll of this report 
entitled "Refining of California Petroleum," to which chapter reference 
is hereby made. 



If)!) Rl^'ORT OF COMMITTEK ON PETROLEUM. 

3. Internal Combustion Engines. 

lutt'i'iial (H)iiil)ii.sti()n cnyiiu's of the Die.sel and seiu i-Diesel type for 
units up to 1,000 horsepower eoiitiniie to attract interest from the stand- 
point of small and medium sized stations. Following the government's 
juniounced policy of equipping at least a portion of the new cargo 
carriers now under construction with engines of tliis type, the Diesel 
engine has attracted renewed and widespread interest for marine 
installations. 

Recent tests of eight Dii^scl plants in Texas, i-anging in si/e from units 
of 170 horsepowei" to ;").'>() Iiorsepowci". indicated thcrnud efficiencies of 
I'rom 18 p(>r cent to 20.7 per cent. These tests, however, were made 
under actual operating conditions with load factors I'anging from 35.6 
|)er cent to ()4.2 ])ei' cent. Actual efficiencies under tests would probal)l\' 
show efficiencies slightly in excess of 30 per cent. The efficiency indi- 
cated, while only slightly higher than that obtained in recent tests of 
large turbo-generating luiils. is of particiilai- intci'esl when it is con- 
sidered that the probable average efficiency ol)tained from steam engines 
of compara])le -size Avould not cxccchI 10 to 12 per cent. Notwith- 
standing the high thermal efllcicncy of the Diesel engine, little relief can 
be expected in the innnediate future through the substitution of this 
type of engine for the less etJHcient small steam engine, for the reason 
that the greater cost of the Diesel engine, added to the cost of changing 
the existing installation, will etfectively jii-cvcnt any rapid change, at 
least during the present emergency. 

Stationary internal coml)ustion engines otiiei- than the Diesel type 
continue to show satisfactory progress where snudl miits arc required 
or where gas is available at low cost in (piantities sufficient to justify 
tlieir use in larger sizes. The thermal efficiency of the engines varies 
li'om If) to 25 per cent. 

In the various California oil fields whci'c natural gas is available, 
internal combustion engines can 1)e used to advantage and can be used 
more extensively than at present for the inet^cient steam plants now 
furnishing power for jiumping and other well operations. 

4. Automobiles. 

The number of aub)niol)iles in active use in the United States on 
Jaiuiary 1, 1917, was in excess of 3,250.000. AVhat these figures mean 
i'rom the standi)oint of possible fuel reciuirements is clearly shown by 
a com])arison with the nation's water power resources. The U. S. 
(leoh)gical Survey in 1!)08 estimated that the potential water power 
resources of the United States were 53,905,000 horsepower. This total 
is only 70 per cent of the horsepower capacity of automobiles in actual 
service at the beginning of 1917. 

The average fuel requirement of all automobiles in the United States 
i^ variously estimated to be from 450 to 500 gallons of gasoline per year. 



CONSERVATION. 151 

On the basis of the lower estimate, the annual gasoline requirement of 
Ihe automobiles in this country at the beginning of the present year was 
1 ,462,500,000 gallons, or about 34,800,000 barrels. 

In California alone at the present time over 248,000 automol)iles, 
with an aggregate power eapacit}' in excess of 5,900,000 horsepower, 
are in active use. On the same basis of arriving at the fuel require- 
}i!ents hereinbefore used, the present yearly gasoline requirements of 
motor vehicles in California would be over 2,660,000 barrels, or about 
5H per cent of the state's entire gasoline output. 

Based on a comparison of the summer and winter use of gasoline for 
automobile fuel, and considering various other factors, it has been 
roughly estimated that 38 per cent of the automobile requirements are 
ior what may be termed pleasure purposes. If this assumption is 
lorrect and the gasoline consumption of such "jitney" traffic as is 
unnecessary is added, it would appear that not less than 13,900,000 
barrels of gasoline could be conserved in the United States each year 
during the war, if the national necessity were found to warrant the 
federal government in prohibiting the use of gasoline excefjt for neces- 
.sar.y commercial, industrial and military purposes. The corresponding 
.saving of gasoline in California Avould exceed 1,000,000 barrels per year 
; t the present rate of consumption. 

Housewives ma.y render material a.ssistance by eliminating unneces- 
sary store deliveries. The coordination of store deliveries will assist 
to the same end. 

Whether the use of automobiles for so-called pleasure purposes should 
be curtailed or prohibited during the war, so as to conserve the gasoline 
for the higher uses of the Navy and tlie Army, and particularly for the 
use of our military aeroplanes, is a question of national policy equally 
;q)plicable to all sections of the country, on which the federal govern- 
ment alone shouhl aiul undoubtedly will speak if it should become 
necessary. 

III. Suhstifiition of Oih< r Fuel or rower for (Uilifornia Fuel Oil. 

In C*haptcr VIII avc have pointed out the purposes for which, and the 
localities in which, California petroleum and its products are used. 

Can any part of the California fuel oil thus utilized be saved l)y the 
substitution of otlier fuel or power? 

In answering this question we shall consider the following subjects: 

A. Other fuel oil. 

B. Coal. 

C. Powdered coal. 

D. Hydroelectric energy. 

E. Natural gas. 



152 REPORT OF COMMITTEE ON PETROLEUM. 

A. Other Fuel Oil. 
It has been suggested that the shortage in California fuel oil may 
povsibly be supplied, at least in part, by fuel oil from some other region. 
I\rexico and Alaska are the only territories which have been suggested in 
this connection. 

1. Mexico. 

The present proved petroleum fields of Mexico are located on the east 
coast, inland from Tampieo and Tuxpam and on the Isthmus of 
Tehuantepec. 

According to official records of the de facto government of Mexico, 
prepared from reports furnished by all operating companies, a.s reported 
iu the Oil Trade Journal of March, 1917, the total production of Mexican 
crude oil in 1916 was 39,817,402 barrels, an increase of 6,906,894 barrels 
over 1915. The exports in 1916 are reported by the same authority to 
have been 26,998,744 barrels, consisting of 21,183,728 barrels of crude 
((11 and 5,815,016 barrels of refinery products. Mr. E. L. Doheny, 
president of the Pan-American Petroleum and Transport Compan \ . 
^Mexican Petroleum Company, and other Mexican oil companies, testi- 
fied, on June 20, 1917, before the Committee on Public Lands of the 
United States Senate, that in 1916 approximately 40,000,000 barrels 
of petroleum and its products were shipped from Mexico, of which 
amount approximately three-fovirths came to the United States. Mr. 
Doheny has advised us that due to increased marine transportation 
facilities the exports of Mexican petroleum for 1917 will exceed the 
( xpcrts for 1916 by approximately 13,000,000 barrels. 

Referring to the possibility of increased petroleum production in. 
.Mexico, the Oil Trade Journal of March. 1917, at page 76, reports 
as follows: 

"To .show how strenuously the production of IMexico is held in 
clieck with scarcely any drilling in marvelously rich territory, it 
is only necessary to compare the present average production of 
about 136,000 barrels a day with the conservatively estimated 
capacity of the completed wells, which is over 600,000 barrels a day. 
Not more than one-fifth of the possible production of IMexico's 
wells is marketed and .stored. It is agreed by authorities that the 
petroleum output of Mexico could l)e raised to 1,000,000 ])arrels a 
day if requirements demanded it or transportation facilitie^s were 
available." 

From the information available to us it appears that the jMexican 
l)etroleum fields are capable of very largely increased development and 
that in normal times, with adequate transportation, facilities, Mexican 
jietroleum will be able to a considerable extent to meet the demands 
made on a diminishing California production. For this purpose Mex- 
ican petroleum can hereafter.be transported through the Panama Canal 
or through a pipe line to be constructed to the M-est coast of Mexico and 



CONSERVATION. 153 

tlieiK-e by water. The possibility of securing Mexican petroleum after 
the war will be a factor of tremendous importance to the Pacific coast, 
Avhich has learned to rely on California petroleum. 

Prior to 1916 Union Oil Company of California was under contract 
to deliver approximately 2,750,000 barrels annually of California fuel 
oil in Chili, principally for the operation of the nitrate fields. This 
fuel oil was transported from California to Chili in tank vessels leased 
by Union Oil Company. 

Under contract between Union Oil Companj' and one of the Mexican 
oil companies controlled by Mr. E. L. Doheny, fuel oil to supply the 
Union Oil Company's requirements in Chili is now sold to the latter 
company at Tampico and transported through the Panama Canal to 
Chili, thus releasing an equal amount of California fuel oil. Delivery 
under this arrangement commenced on January 29, 1917, and amounted 
to 1.050,000 barrels from January 29 to IMay 18, 1917. 

After making this arrangement and as a result thereof Union Oil 
Company sold 1,000,000 barrels and loaned another 1,000,000 barrels of 
fuel oil to Kern Trading and Oil Company for consumption by South- 
ern Pacific Company and sold 1.000,000 barrels and loaned another 
1,000.000 barrels to Associated Oil Compau}', to enable that company 
to meet its requirements. 

Excluding the amount of fuel oil transported by Union Oil Company 
to Chili, approximately 3,000,000 barrels of California fuel oil Avere 
delivered in 1916 at points on the west coast of Mexico, Central 
America and South America, and at the Panama Canal. We believe 
Ibat a consideral)le portion of this fuel oil can be supplied from the east 
coast of IMexico, thus relieving an equivalent amount of California fuel 
oil and to this extent alleviating the shortage of California petroleum. 

Can any further amount of California fuel oil be released during the 
>var })y the substitution of fuel oil from IMexico? 

It has been suggested that IMexican fuel oil can be brought to the lines 
of the Southern Pacific Company at some point in Texas and used to 
operate the Southern Pacific Company '.s Tucson Division, extending 
from El Paso on the east to Yuma on the west. During the spring of 
]917 tlie Southern Pacific Company consumed 7,111 barrels of fuel oil 
daily on the Tucson Division. 

It is not suggested that this fuel oil can be brought from Tampico to 
T<\\a.s by Avater. The present shortage of oil tank steamers is a matter 
of common knowledge. Although a number of such steamers are now 
under construction for the purpose of transporting Mexican oil, it is not 
intended that they shall transport oil for use on the lines of the Southern 
Pacific Company and it is by no means certain that these vessels will 
not be requisitioned by the federal government. 

The suggestion has been made that the problem can be solved by the 



VA 



REPORT OF COMMITTEE OX PETROLEUM. 



lrimsj)urtation of fuel oil from Tanipieo to Texas in tank cars over the 
National Railways of ^Mexico and tlieuce over the lines of the Southern 
l^aeifie Company west to El Paso and other points on the Tucson 
Division. 

Whether the National Railways of ^Mexico are in a position to handle 
iliis traffic is not knwon. In the "Official Guide" of this railroad 
appears the following- notation: 

"On account of disturbed conditions in ^Mexico and the irregu- 
larity of train service, the National Railways of ]\Iexico has 
temporarily ceased to publish the usual train schedules." 

We know that a considerable portion of the line of the National 
Railways of Mexico is in deplorable physical condition. Assuming that 
the line M'ere available for operation, oil tank cars would move from 
Tampico to San Antonio, Texas, a distance of approximately 729 miles, 
or frcm Tampico to Eagle Pass, Texas, a distance of approximately 615 
miles, or from Tampico to El Paso, a distance of approximately 1,070 
iniles, to points of connection with the lines of the Soutliern Pacific 
Company. 

At the present time, assuming' the very high average daily mileage of 
Tf) miles i)er car, 298 oil cars are in constant service to and from Los 
Angeles, to meet the requirements of the Tucson Division, as follows : 



Oil station 


Daily re- 
quirements 


Distance from Los 
Angeles 


Tanlc cars 
needed 


Yiima - 




4 cars 
4 cars 
6 ears 

3 cars 

4 cars 
1 ear 


250 miles each way 
372 miles each way 
500 miles each way 
614 miles each way 
664 miles each way 
750 miles each way 




?8 


Gila 




44 


Tiicsfui _ -- _ 




78 


IJowie . . 




51 


I.()idsl)urg .- -- -- 


76 


C'ambray 


?1 










298 



Assuming delivery from Tampico over the National Railways of 
JMexico to the Southern Pacific lines at El Paso, Texas, and thence to 
l)oiuts on the Tucson Division, and assuming again an average per- 
formance of 75 miles per car per day, 832 oil tank cars would be in 
constant use as follows: 



oil statiQii 


Daily re- 
quirements 


Distance from Tampico 


Tanlt cars 
needed 


Camhrav 


1 car 
4 cars 

3 cars 
6 cars 

4 cars 
4 cars 


1,131 miles each way 
1,219 miles each way 
1,260 miles each way 
1,374 miles each way 
1,503 miles each way 
1,626 miles each way 


31 


Lordsburg 


133 


Bowie - .. 


103 


Tucson -- -- 


223 


Gila 


165 


Ymiia 


177 








832 



CONSERVATIOISr. 155 

It is iiK'onceivalile that the railroads of Mexico should be able in their 
jiresent eonditioii to transport oil tank cars 75 miles per day. If a 
23 per cent correction factor is supplied, at least 1.040 oil tank cars 
would be in constant use if Tampico oil were transported to Southern 
Pacific Company's Tucson Division, with delivery at El Paso. This 
number is approximately 700 tank cars in excess of the number now 
necessary to supply the Tucson Division with fuel oil from Lo.s Angeles. 

The total number of tank cars owned by the Southern Pacific Com- 
pany's Pacific System is reported by the company to be 2.572, of which 
.'!00 arc in special .service. 109 leased to the Pacific Electric Railway 
Company and the Southern Pacific Company's Atlantic System, 1,035 
in connnercial service, approximately 128 in bad order and 1,000 in the 
company's fuel service, of which latter number 500 are em])loyed in the 
Southern District and 500 in the Northern District. Seven hundred oil 
lank cars could not be taken by the Southern Pacific Company from its 
connnercial service without .seriously disturbing existing industries 
which are dependent upon the fuel oil transported by these cars. We 
have been unable to ascertain from what source the Southern Pacific 
Company could at this time reasonably secure the necessary number of 
additional oil tank cars for this service. 

Due to the high viscosity of I\Iexican fuel oil considerable time would 
be required to make the necessary changes in the Southern Pacific Com- 
pany's locomotives on the Tucson Division. Furthermore, the necessity 
<f transporting 700 additional oil tank cars on its Tucson Division 
would seriously interfere witli the efficient transportation by the 
S( utliern Pacific Company of per-ons and property for the federal 
L't)V(>rnment and otherwise. 

In view of the present and prospective transportation difficidties, 
\\<' are of the opinion that it will not be possible to utilize Mexican fuel 
I'il. tluring the period of the war, to supply any substantial part of the 
uses now being supplied by California fuel oil, with the possible excep- 
tion of a part of the fuel oil used on the west coast of Mexico, Central 
America and South America, and constituting approximately 3 per cent 
if the entire production of the state. 

2. Alaska. 

In 1!)1G California shipped 475,000 barrels of fuel oil to Alaska, of 
uliicli amount 73.000 barrels were used by steamship companies, 8,000 
l)arrels by other public utilities, 342,000 barrels by mining and smelting 
companies, 10,000 barrels by other commercial enterprises, and 41,000 
l)arrels for other purpoes. During the same year California shipped to 
Alaska approximately 94,000 barrels of the products of petroleum, prin- 
cipally distillates and gasoline. 

The fish canning and other industries of Alaska are largely dependent 
on v(>ssels propelled by distillate or gasoline. 



¥ 



156 



REPORT OP COMMITTEE ON PETROLEUM. 



About eight or nine producing oil wells, yielding only eight to ten 
barrels each daily, have been developed in the Katalla fields near 
Controller Bay in Alaska. The oil has a parafifine base and is valuable 
I'or the production of gasoline and distillate, but not for fuel. 

AVith the exception of one 140-acre tract which was patented, all 
other petroleum lands in Alaska have been withdrawn from entry by 
the federal government and further development thereon stopped. In 
any event, there is no assurance that Alaska would have a large 
l)roduction. 

Under existing conditions it is doubtful that during the war any part 
of California petroleum and the products thereof now shipped to Alaska 
can be released by the production of petroleum in Alaska. 

B. Coal. 

We have given careful consideration to the possibility of substituting 
coal, at least in part, for California fuel oil. 

We shall consider the situation separately as to (1) California and 
(2) the Northwest. 

1. California. 

California produces only a negligible quantity of marketable coal. 
In this respect her situation is similar to that of the west coasts of 
IMexico, Central and South America and Hawaii. 



a. Sources of Coal Supply. 

California has heretofore secured coal principally from Australia, 
British Columbia, eastern United States (by water), Washington and 
Oregon, and the Kocky JMountain States. 

Table 28 is condensed from the liJlG report of the San Francisco 
Chamber of Commerce and shows the receipts of coal in tons at San 
Francisco in 1916. 

TABLE 28. 
Receipts of Coal in Tons at San Francisco, 1916. 



Year 


*Foreign 
overseas 


British 
Columbia 


Washlugtou 


Oregon 


Rocky 
Mountain 
coalflelds 


Eastern 

U. S. liy 

water 


1908 

1909 


243,284 

97,286 

202,414 

163.816 

97,089 

170,801 

162,548 

98,603 

8.115 


167,415 
179,187 
166,443 
200,646 
173,753 
40,297 
97.598 
147,573 
213.442 


( 
29.426 ' 
25.557 
65,085 
59,128 
49,829 
66.344 
12,637 
1,208 
33,528 . 


24.885 

24.470 

13,572 

4,655 

1,200 

-950 

73 

320 





171,875 
76.081 


1910 




86,744 


1911 

1912 

1913 

1914 

1915 

1916 


10,930 
19.080 
47.250 
39,030 
68,055 
104,850 


154,789 

122,093 

126.668 

60,219 

92,128 









•Australia, Great Britain, Japan and China. 



CONSERVATION. 1 57 

As apjiears from the foregoing table, the importation of coal into 
San Francisco from the eastern part of the United States by water 
ceased entirely in 1916. The importation from Australia and other 
overseas countries ceased in May, 1916. In 1916 San Francisco was 
compelled to rely for her coal on British Columbia, the Eocky Mountain 
States and Washington. 

In 1916 Los Angeles consumed 60,000 tons of coal, of which 43,000 
tons were shipped from the Utah and Wyoming fields and 17,000 from 
New Mexico. During the first six months of 1917 the shipments of 
coal to Los Angeles are reported to have been but 50 per cent of the 
1916 shipments, due largely to the shortage of labor at the mine.s and 
in part to transportation conditions. 

In considering the possibility of securing coal for California during 
the war, we are at once confronted by the impossibility of securing coal 
from Australia and other overseas countries and also from the eastern 
part of the United States, due to the lack of vessels. We are advised 
that there is a serious shortage of labor in each of the remaining coal 
jiclds on which California has heretofore relied, particularly in British 
( 'olumbia. 

The situation is made more critical by transportation difficulties, liotli 
))y laud and water. 

With reference to the possibility' of securing coal from Alaska, we are 
advised by Honorable Franklin K. Lane, Secretary of the Interior, by 
telegram dated June 12, 1917, as follows: 

"Alaska coal surrounded with such difficulties of topographic 
and geographic character that development will be slow and should 
not be relied upon for supplying Pacific coast for one or two years. 
JMans for developing these fields being pushed by department as 
much as possible. Some coal now being mined for use on govern- 
ment railroad." 

During the winter of 1916-17, California experienced considerable 
difficulty in securing even the relatively small amount of coal which 
the state required for domestic purposes. 

The increasing seriousness of the labor situation at the coal mines on 
which California must rely and of the transportation situation show 
the futility of relying on coal to any material extent dui'ing the Avar to 
lake the place of fuel oil now used in California. 

h. Relative Prices of Fuel Oil and Coal. 

Whether fuel oil or coal will prevail as a fuel would ordinarily 
depend upon the play of well known economic forces, among which are 
the relative price of the two fuels, bearing in mind their relative 
efficienc}', and the convenience of their respective use. 



158 REPORT OF COMMITTEK ON PETROLECM. 

Pacific Gas and Eleeti'ic ("uiiipaii\-. wliidi coinpaiiy has juade a careful 
study of this subject, rei)orts to lis that the avei'aye lieating value of coal 
heretofore sold in California and adjacent states, and produced in 
Colorado, New iNIexieo, WavShin*iton, Wyoniinu' and Utah, has been 
approximately 11,033 British thermal units per pound of dry coal. 
Assuming a boiler efficiency of 65 per cent, 7.150 British thermal units 
would be available from this coal. California fuel oil has a heating 
value of approximately 18,500 British thermal units per pound and can 
he burned with an efficiency of 75 per cent, so that the boilers absorb 
13,870 British thermal units from each pound of oil. Consequently, 
one pound of fuel oil is equal, for steaming purposes, to 1.94 pounds of 
coal of the character hereinbefore referred to. One ton of this coal, 
containing 2,000 pounds, would therefore be equivalent to 3.07 barrels 
of oil, or approximately three barrels. 

The price of California petroleum of between 14 and 17.9 degrees 
Baume gravity is now 98 cents per barrel at the wells, and $1.45 
per barrel delivered on San Francisco Bay. The price of coal at 
San Francisco is indefinite at the present time. Coal dealers report 
that they are securing between $10 and $11 per ton for small 
fpiantities. Assuming, merely for the purpose of the illustration, that 
coal could be secured at San Francisco in large quantities for $8.00 
per ton, fuel oil would have to advance to $2.66 per barrel before it 
would be eciuivalent in price to coal, without giving consideration to 
the investment necessary for conversion from oil to coal. 

It is evident that at the present relative prices of fuel oil and coal in 
('alifornia, few consumers of fuel oil will voluntarily give up its use ainl 
revert to coal if they can have an assurance of a continued supply of 
fuel oil. 

c. California Railroads. 

Because of their large use of fuel oil and the seriousness, from the 
])ublic point of view, of their particular problem, we have given special 
consideration to the situation of the railroads which are operated by 
California fuel oil. These railroads include the principal railroads of 
California, Nevada, Oregon and Arizona, a part of the railroads of 
Washington, Utah and New IMexico and a part of the Canadian Pacific 
Railway in Canada. 

We .shall now consider the situation of the principal railroads which 
liiirn fuel oil in whole or in part in California and the adjacent states to 
the east, and shall hereinafter consider the .situa.tion of the railroads and 
other industries of the Northwest. 

The five principal railroads of California arc the Southern Pacific 
Company; The Atchison, Topeka and Santa Fe Railway Company, 
herein referred to as the Santa Fe; the Los Angelas and Salt Lake 
Railroad Company, herein referred to as the Salt Lake; the Western 



CONSERVATION. 150 

Pacific Railroad Company, herein referred to as the Western Pacific; 
and the Northwestern Pacific Railroad Company, herein referred to as 
the Northwestern Pacific. 

California fuel oil operates the Southern Pacific Company's lines in 
California, east through Arizona and New Mexico to El Paso, Texas, 
cast through Nevada to Ogden, and north to Portland, Oregon ; the lines 
(if the Santa Fe in California and east to Winslow. Arizona, and also 
cue-third of the road locomotives from Winslow east to Callup, New 
IMexico, as well as the switch engines at Winslow and Gallup; the lines 
of the Salt Lake in California and northeast through Nevada to Milford, 
( 'tall, as well as freight locomotives from IMilford northeast to Lynndyl. 
I 'tall; the lines of the Western Pacific in California and east through 
Nevada to Wendover, Utah ; and the entire lines of the Northwestern 
Pacific from San Francisco north to Eureka, California, with the 
exception of the company's interurban electric system in southern INIarin 
County and a small branch line on which wood is liurncd. 

Table 29 shows with reference to each of these railroads the lines on 
which California fuel oil is used, the number of barrels of fuel oil 
used ill 1916, the daily average in 1916, the number of barrels of fuel 
• 111 used in January to April, inclusive, 1917; -the daily average Janu- 
;My to April, inclusive, 1917; the total use in barrels for 1917 as 
estimated by the respective railroads, and the estimated daily average 
lor 1917. 



ir.o 



REPORT OF COMMITTEE ON PETROLEUM. 



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CO -"^ CO ci »H 




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CONSERVATIOK. 



161 



The foregoing table gives data with reference to only the five prin- 
cipal ('alifornia railroads. As will be observed, the average daily con- 
snmption of these five railroads from January to April, inclusive, 1917, 
v,as 55,295 barrels, which amount was approximately 21 per cent of the 
entire California production during tliis period. 

We shall now consider in somewhat more detail the fuel oil situation 
')f each of these five railroads, with a view to thereafter considering the 
possibility of substituting coal for all or a portion of their fuel oil 
leiiuirements. 

SOUTHERN PACIFIC COMPANY. 

The Southern Pacific Company secures its fuel oil principally from 
the production of a subsidiary corporation known as Kern Trading and 
Oil Company. A relatively small amount of fuel oil is purchased by 
Kern Trading and Oil Company from third parties. 

Table 30 shows the fuel oil situation of the Southern Pacific Company 
during the months ending ]\Iarch 31, 1917, April 30, 1917, and 
May 31, 1917. 

TABLE 30. 

Southern Pacific Company — Fuel Oil Situation — March, Ajjril and May, 1911. 



Month 
ending 

Mar. 31, 
1917 

(barrels) 



Not production of Kern Trading and Oil Company 

Borrowed from Union Oil Company 

Purchases and royalty of oil from lessees of rail- 
road lands 

Net amount received by Kern Trading and Oil Com- 
itany on account of exchange of lighter oil for 
fuel oil 



Total receipts 



749,983 
1,375 

81,850 



68,192 



901,400 



Fuel oil consumption of Southern Pacific Company. 1,260,212 
Excess of consumption by Southern Pacific Com- 
pany over receipts j 358,812 

Daily excess of consumption by Southern Pacific 

Company over receipts \ 11,575 

Oil stocks in storage tanks of Kern Trading and' 

(>il Company 789,028 

Oil in storage tanks of Southern Pacific Company.. 738,094 
Oil purchased from Union Oil Company and not 
yet delivered 1,000,000 



Month 
ending 

April 30, 
1917 

(barrels) 




928,972 

1,200,750 

271,778 

9.060 

590,577 
742,702 

1,000,000 



Month 
ending 

May 31, 
1917 

(barrels) 



685,657 
145.333 

132,917 



96,211 



1,060,118 

1,253,293 

193,181 

6,232 

480,067 
786,217 

1,000,000 



On the basis of the returns for the month of IMarch, 1917, it 
iippeared that the Kern Trading and Oil Company's storage, together 
with the 3,000,000 barrels purchased from Union Oil Company, would 
be consumed by the Southern Pacific Company in approximately five 
months, or by September 1, 1917, at which time it woidd be necessary 
11— .S]4<VJ 



102 REPOHT OF COMMITTE?: OX PETHOLKI'M. 

for tile Soutlu'i'ii Pacilic Company to ctitci- tlic nuii'kct aiul jjiii'diasi' 
fuel oil from tlic amount stored by the [)rincipal companies, pai'ticnlarly 
the Stanchird Oil Company and I'nion Oil Company. The returns from 
later months, however, indicate tliat under existing tendencies the Kern 
Trading- and Oil Company's stocks and the 1.000,000 barrels purchased 
fi'om Union Oil Company -will not be exhausted until December. 1917. 

While the amount of oil held in storage by Kern Trading and Oil 
Company decreased from 780.028 barrels on March 31 to 590,577 barrels 
on April 80 and 480,067 barrels on :\ray 31. 1917. it is also true that 
the average excess of daily consumption of fuel oil by the Southern 
Pacific Company over receipts decreased from 11.575 barrels in INIarch 
to 9,060 barrels in April and 6,232 barrels in May. The Southern 
Pacific Company reports that up to June 12, 1917, it had not as yet 
taken any fuel from Union Oil Company under the purchase contr;;ci. 

It will be observed from Table 30 that the net production of Kern 
Trading and Oil Company decreased from 749,983 barrels in the month 
of March to 699,131 barrels in April and 685,657 barrels in i\Iay. 
Attention should be draAvn, however, to the fact that Kern Trading 
and Oil Company is engaged in a very active campaign of drilling 
operations in some of the best undrilled territory in the INIidway, Sunset 
and Coalinga fields. The land on which these wells are being drilled is 
all Southern Pacific Company land now in litigation with the federal 
government. lender the so-called "gentlemen's" agreement between 
Southern Pacific Company and the government in the Southern Pacific 
suits, Kern Trading and Oil Company can drill no wells which are not 
"defensive" wells. This agreement precludes any intensive develop- 
ment of any of the Southern Pacific lands, although they are among 
the best undrilled lands in the state. 

In the early part of June, 1917, Kern Tradinu and Oil Company was 
engaged in erecting derricks and had connnenced drilling new wells, or 
was about to do so. as follows : 

Coalinga Field. 

In section 11. township 19 south, range 15 east, M. D. M., contracts 
were let for the erection of derricks at wells Nos. 51, 52 and 53. Con- 
tracts were likewise let for the drilling of wells Nos. 52 and 53. Kern 
Trading and Oil Company proposed to drill well No. 51 with its own 
tools. 

On section 35, township 19 south, range 15 east, M. D. M., conli-actors 
were at work rigging up on wells Nos. 44 and 45. Contracts for wells 
Nos. 41, 71, 72 and 4() wei'e agreed upon and the constj-uction of derricks 
was commenced. 

Sunset Field. 

In section 31. township 12 north, range 23 west, S. B. i\r., derricks 
u,.-,. <'u„j, lifted on wells Xos. 58. 59. 60 and 61. Contracts were let for 



CONSERVATION. 16:^ 

di'illiug ^vells Xos. (JO find (il and Kern Trading' and Oil Company 
cominenced work witli it> own crews on wells Xos. 58 and 59. 

In section 5. township 11 north, range 23 west, S. B. M., derricks were 
being erected on ^\'ells Xos. 62, 64 and 65 and contracts for drilling 
these wells had been agreed npon. Aetna! drilling operations were 
awaiting the arrival of drill stem from the east. 

Midway Field. 

In section 1, township 32 south, range 23 east, 'SI. 1). M.. in Xaval 
Reserve No. 2, adjacent to Standard Oil Company- 's section 36. derricks 
were completed for wells Xos. 57, iiS and 59, and drilling was in progre.ss 
on X"os. 57 and 59. Work was also being done on wells Xos. 56 and 41. 

In addition to the wells hereinbefore referred to. Kern Trading and 
Oil Company, during the month of ^lay, did considerable work on 
derricks and rigs for regular line location.s on wells Xos. 15 and 21, 
section 25, township 31 south, range 23 east. ]\I. D. ^1., in Xaval Reserve 
Xo. 2. in the ^lidway tield; wells Xos. 33 and 37. in section 19, township 
32 south, range 24 east, ^l. D. ]\I.. in the ^lidway field adjacent to Xaval 
Reserve Xo. 2 on the vsouth ; well Xo. 3 in section 17, township 32 south. 
range 24 east, ^I. D. 'SI., in Xaval Reserve Xo. 2. in the >Midway field; 
and Xos. 3 and 5 in section 31. township 12 north, range 23 west, 
S. B. M.. in the Sunset field. 

As already- indicated, these wells are all I'v-ated in excellent oil terri- 
tory and it must be assumed that when they are brought in they will 
add nuiterially to the monthly net production of Kern Trading and Oil 
Company. 

Attention should also be drawn to the fact that subsequent to ^larch 
1, 1917, Kern Trading and Oil Company has entered into contracts for 
the purchase of oil from third parties, as follows: 

(1) Contract dated ^larch 10, 1917. with Tnion Oil Company for the 
borrowing of 1.000.000 barrels of fuel oil. this oil to be returned to 
Union Oil Company within eighteen months. Deliveries are being 
made under this contract, as already shown. 

(2) Contract dated May, 1917, with Richfield Oil Company providing 
for the delivery from date of the contract to January 1, 1918, of 
lietween 25.000 and 45,000 barrels of fuel oil per calendar month. 

(3) Contract dated May 18, 1917, with Howard M. Payne, receiver, 
providing for the sale during one year from June 1, 1917, of one-half 
of the total production from the SE. ^ of the SW. | of section 32. 
township 12 noi'th. range 23 west. S. B. 31., known as the JMcCutcheon 
property. The contract provides that the maximum delivery shall not 
exceed 10,000 barrels per month or 2.000 barrels per day. 

(4) Contract dated May 18. 1917. with Howard 31. Payne, receiver, 
providing for the sale during one year from June 13, 1917, of the total 



164 REPORT OF COMMITTEE OK PETROLEUM. 

anion at of petroleum produced on the S. | of the S. ^ of the SE. ^ of 
seetioii 1-4, township 31 south, range 22 east, M. D. j\l., this property 
being claimed by Stockton ^Midway Oil Company. The contract pro- 
vides for a maximum delivery of 10.000 barrels per month and 2,000 
liarrels in any one day. 

(5) Contract dated May 19, 1917, with Inca Oil Company for a 
term of 12 months from May 19, 1917, providing for the sale of between 
13,000 and 14,000 barrels monthly. 

A few thousand barrels of oil have also been purchased under smaller 
contracts. 

SANTA FE. 

The Santa Fe secures its fuel oil from two subsidiary corporations, 
known as Chanslor-Cantield ]\Iidway Oil ("ompany. operating in the 
Midway and McKittr-ick ticlds, and Petroleum Development Company, 
operating in the Whittier-Fullerton field. Tliese companies secure their 
fuel oil in part from their own operations and in part by purchase 
from third parties. 

Tile Clianslor-Canfield IMidway Oil Company is now actively engaged 
in drilling operations in the jNlidway field. The company reports 151 
producing wells and 31 drilling wells as of June 1, 1917, with a produc- 
tion during ^May of 280,634 barrels and an estimated production for 
1917 of 3,290,000 barrels. 

The Petroleum Development Company reports 70 producing wells 
and four drilling Avells during the month of May, with a production of 
50,820 barrels in May and an estimated production of 600,000 barrels 
during 1917. 

The Santa Fe reports that through the production of these two com- 
panies and the oil which they have purchased it will be able to meet its 
requirements for fuel oil during at least the year 1917. 

SALT LAKE. 

The Salt Lake secures its fuel oil from Associated Oil Company under 
contract dated December 1, 1914, expiring on November 30, 1917, and 
providing for a maximum delivery of 7,000 barrels per day. 

WESTERN PACIFIC. 

The "Western Pacific secures its fuel oil from Standard Oil Company 
under contract expiring on January 1, 1919. and providing for a 
maximum delivery of 90,000 barrels per month. 

NORTHWESTERN PACIFIC. 

Noi'thwestern Pacific secures its fuel oil from Associated Oil Com- 
pany under two contracts, the one dated November 20, 1915, expiring 
on January 31, 1918, and providing for a maximum annual deliverj^ of 
180,000 barrels, the other dated May 1, 1915, expiring on April 30, 1918, 
nnd T>roviding for a maximum monthly delivery of 75,000 barrels. 



CONSERVATION. 165 

(l. Possible Conversion of California Railroads From Fuel Oil 

TO Coal. 

We shall now consider the facts bearing on the possibility of convert- 
ing California railroads, in whole or in part, from fuel oil to coal. 

southern pacific company. 

Southern Pacific Company recently sent telegrams to 26 coal com- 
panies in Wyoming, Utah, Washington, New Mexico, Arizona and Cali- 
fornia, asking for definite information as to whether these companies 
conld supply 18,000 tons mine run locomotive coal daily, beginning 
September 15, 1917, and asking for prices at the mines. Southern 
Pacific Company has submitted to us copies of the answers received from 
the 16 companies which replied. These answers indicate a possibility of 
securing only a part of this coal from Washington and Utah. No 
company reports definitely that it will be ready to deliver the entire 
amount of coal referred to in the Southern Pacific Company's telegram. 

The Southern Pacific Company's Pacific system reports the ownership 
of 2,463 coal cars, which cars for a number of years have been employed 
and are now employed in transporting commercial traffic other than 
coal.. The company reports that it would take between 4,000 and 5,000 
coal cars to provide for a consumption of about 11,000 tons of coal 
per day, and states that such an amount of coal cars it not available. 
The conversion of any portion of a railroad system from fuel oil to coal 
presupposes the construction of bins for the storage of coal, trestles 
for unloading cars, tipples for loading engines, and other loading and 
unloading facilities, and the construction of cinder pits at all round- 
houses and terminals. The Southern Pacific Company reports that it 
is doubtful whether the delivery of material for the conversion of loco- 
motives from fuel oil to coal could begin much before January 1, 1918. 
The company reports that approximately 90 locomotives per mouth 
could be converted from oil to coal at an average cost of between $500 
and $600 per locomotive. 

Such engines would be kept out of service during the period neces- 
sary for their conversion and the Southern Pacific Company draws 
attention to the loss in efficiency of its operations during this period 
and also thereafter. 

SANTA fe. 

The Santa Fe reports that it would cost $1,044,500 to convert 486 
locomotives from oil to coal, to equip 133 .such locomotives with auto- 
matic stokers and to construct 20 additional mechanical coal chutes. 

The company further reports that the only coal mines in operation 
contiguous to its oil-burning lines are at Gallup, New IMexico, and that 
the output of these mines for commercial purposes has fallen about 
40 per cent, due to the scarcity of miners, who have been attracted by 
the high wages which are now being paid at the copper mines. 



h)t) Hioroiri' of committee on petroleitm. 

While it may be possible for the Santa Fe to convert its oil-l)urninu 
lilies east of J^arstow. California, to coal, snch convei'sion would reciuire 
the expenditure of a lar*;e sum of money, would i-esult in increased 
contj'estion of traffic by reason of the transportation of large numbers 
of eoal cars, and would result in decreased efficiency of operation. 

SALT LAKE. 

Tile Salt Lake is at present l)urning coal on its lines from Salt Lake 
10 Lyinidyi, Utah, and on its passenger locomotives between Lyinidyl 
and .Milford, Utah. 

The company reports that the estimated cost of converting its oil- 
burning' engines to coal would be approximately .$65,()()0 and that in 
addition thereto it would be necessary to construct facilities for 
handling coal at terminals and intermediate coaling stations at a cost of 
approximately $215,000. 

The Salt Lake reports that it is now engaged in converting additional 
locomotives from fuel oil to coal, and that it hopes by the expii-ation 
of its fuel oil contract on November 30. 1917. to have converted to coal 
all locomotives from Salt Lake City west to Caliente, Nevada. 

Coal is delivered to the Salt Lake by the Denver and Rio Grande 
Railroad ('ompany at Provo, Utah. 

WESTERN PACIFIC. 

Western Pacific reports that it has 111 oil-burning engines, the con- 
version of which to coal would cost between $500 and $600 per engine. 
The company further reports that it would take from one to two 
yeai's under or-dinary conditions to convert these engines from oil 
to coal. 

The compan\- is uow [jlanning to convei't its engines between Wen- 
dover, Utah, and Elko, Nevada, from oil to coal, the work to be done 
gradually as the engines pass through the shoi)s. Even with this change 
the company rei>orts that its increasing business will necessitate the ■ 
u-e by it of the maximum amount of 90,000 barrels of fuel oil per 
m(;nth. specified in the company's fuel oil contract. 

NORTHWESTERN PACIFIC. 

The Northwestern Pacific reports that there are no coal deposits along 
its line, otlu-r than undeveloped lignite veins in the middle fork of the ] 
Eel River, and that it is impossible for the company to rely on coal at 
the present time. 

The comi)any reports that it would cost ai)pro.\-imately $25,000 to 
cnnvcrt its locomotives fiom oil to coal and that coaling stations and 
facilities would nvpiire an additional estimated expenditure of $80,000. 

While such portions of California's railroads as are located in prox- 
nuity to the coal mines of New Mexico, Utah. Cok)rado and Washington 



CONSERVATION. 1 07 

■oiild i)robabJy be gradually converted from fuel oil to coal, we are of 
Hie opinion that no very large saving of California fuel oil could be 
effected in this manner during the continuance of the war. 

Attention should be drawn to the fact that such conversion means 
decreased efficiency during the period of conversion, loss of time and 
cf^ciency on the part of the locomotives after they have been converted 
and increased congestion of traffic due to the largely increased number 
of fuel cars which it would be necessary to transport. 

2. The Northwest. 

As shown in Chapter VIII, in 1916 California fuel oil to the extent 
of 17,500.000 barrels was delivered to Oregon, Washington and Canada. 
ior consumption by railroads, steam.ship companies and industries. 

We have given careful consideration to the (juestion whether the con- 
sumers of fuel oil under these contracts would lie likely, at their 
expiration, to turn to other forms of fuel or power, thus relieving 
California fuel oil. 

Washington and British Columbia both produce large amounts of 
good commercial coal. In 1916 Washington produced 3,019,600 short 
tons of coal and 93,700 short tons of coke. The total production of 
British Columbia is not available to us. but it is significant that in 
J 916. 5-4 per cent of the entire importation of coal into San Fraiicisco 
came from British Columlna. Reference has already been made to 
the labor shortage in both Washington and British Columbia. 

We are advised that approximately 1,000.000 barrels of California 
fuel oil annually have recently been released in the Northwest by the 
substitution of coal at the expiration of fuel oil contracts. 

One of the California oil companies was under contract to deliver 
75.000 barrels of fuel oil per month at Portland for account of the 
Oregon-Washington Railroad and Navigation Company, also known as 
the Oregon Short Line. This contract expired on June 30, 1917. The 
oil company gave notice that the contract could not be renewed. We 
understand that the railroad company will henceforth use coal. 

We are also advised that an annual consumption of 12,000 barrels 
of California fuel oil heretofore used by the city of Seattle has been 
released or will shortly be released and that a cenu^nt plant at Belling- 
ham has recently been converted from fuel oil to powdered coal, at an 
annual saving of 84,000 barrels of California fuel oil. 

On the other hand, Canadian Pacific Railway Ccmipany has refused 
to consider the conversion of its line of railway from fuel oil to coal 
and this company's contract was equated by extending its term ten 
months, ba.sed upon the then market price of $1.45 per barrel. A 
similar arrangement has recently been consummated with the Union 
Steamship Company of New Zealand, a large user of fuel oil in the 
Northwest. One of the California oil companies offered to pay the 



UiS HKIH)RT OK rOMMl'I'TKK ON I'KTKOI-KUM . 

larger part of the expense of iustalliiiii' a eoal gras j)laiit for Portland 
(Jas and Coke Coin|iany in consideration of the eaneellation of this 
I'oiupany's contract, but was unal)le to secure the gas company's 
consent. 

One of the best informed oil men of the state has advised us of his 
views with reference to the situation in the Northwest in part as 
follows: 

"INIy pi'evious views on this subject have uiulergone consider- 
able change of late, by reason of the anxiety shown by customers 
in that territory in the matter of .securing contracts for their 
future fuel requirements. Originally I was of the impression that 
with a certain increase in the selling price of oil a large number 
of industries in that section would revert to the use of coal, and I 
expected the change to occur a])()ut the last of the year, when most 
of the larger contracts will expire. INFuch to my surprise such a 
situation does not seem inuninent. and there is an apparent willing- 
ness to pay prevailing pi'ices providing assurances can be given of 
the certainty of a supply. 

"Generally speaking, and with my present knowledge of the 
subject, I would saj^ that the railways of the Northwest would not 
return to coal at this time even if compelled to pay $1.65 per barrel 
for oil. and other cousiuners $2 per barrel. ]iroviding a su]>ply can 
be assured. The only exception to this is the cement plants, which 
will i^robably use ])owdere(l coal, although the development of this 
system has not proc(HHied to the point where it can be used with 
safety and economy in other liiu^s of industi'y."' 

The pre.sident of one of the largt' oil marlvcting com[)anics has advised 
the committee as follows: 

''The situation in the Northwest at the present time is such that 
the i^eople are going to use oil just as long as they can get it, 
l>ractically reg<\rdless of price. In other words, although they have 
coal pi'operties. they are short of labor to the extent that it is 
practically impossible to get coal in sufficient quantities to take care 
of their reciuirements. On the other hand, under normal condi- 
tions, coal will disjilace oil very readily at the present prices of oil 
in that district. In other words, to the best of our knowledge, 
so far as the innnediate future is concerned, there will be no saving 
of California oil through the shrinkage of usage in the Northwest." 

Our general conclusion on the question of the ]H\ssibility of the substi- 
tution of coal for fuel oil in the Northwest is that apart from the case 
of the Oregon-AVashington Railroad and Navigation Company, no sub- 
stantial amount of California fuel oil will be released during the pen- 
dency of the war. but that when conditions have become normal after 
the termination of the war, it is reasonable to anticipate the release of 
a con,sideral)le (puuitity of California fuel oil in the Northwest, if the 
existing prices for California fuel oil are maintained, the conversion 
to be to coal, and iio.ssibly to some extent to powdered coal. 



CONSERVATION. 1<»I' 

C. Powdered Coal. 

Our investigation into the possibility of substituting' other toriiis of 
fuel for fuel oil, particularly in connection with the railroads, has led 
to a consideration of the subject of powdered coal. 

Coal has heretofore been successfully used in powdered form in 
cement plants, stationary boilers or power plants, and in metallurgical 
furnaces for iron, steel and copper. 

We are advised that three railroads in the eastern and central por- 
tions of the United States are at the present time experimenting with 
powdered coal as a substitute for coal on locomotives, but that certain 
difficulties have been encountered which have not as yet been completely 
eliminated. IMany advantages are claimed for powdered coal over coal, 
but it is not necessary here to enumerate or analyze the same. 

The California railroads are not united in their opinion with reference 
to the feasibility of the use of powdered coal on railroad locomotives. 

The Southern Pacific Company reports that the use of powered coal 
on railroad locomotives is still in its experimental stage and that the 
results thus far seem to indicate that it will never prove successful. 

The Santa Fe reports that it has erected two small plants in Missouri 
for experimental work and that experimental tests on one of its loco- 
motives started on I\Iay 1, 1917. The Santa Fe refers to difficulty due 
to a curtain of conglomerate which forms on the flues and shuts of¥ the 
draft. The Santa Fe is hopeful that the experiments with this form of 
fuel for use on locomotives will ultimately prove successful. 

The Northwestern Pacific refers to the expense of equipping loco- 
motives for consumption of powdered coal and of erecting the necessary 
plants for powdering and handling this fuel. This railroad states that 
it has been unable to secure advice with reference to definite results 
obtained from the use of powdered coal on railroad locomotives. 

Powdered coal can be utilized only where coal is available. 

In view of the coal situation in the territory in wdiich California fuel 
oil is utilized and of the fact that to a considerable extent the use of 
powdered coal is still in an experimental stage, we are of the opinion 
that during the emergency created by the war we can not look to the 
use of powdered coal to any substantial extent as a substitute for 
California fuel oil. 

D. Hydroelectric Energy. 

The possibility of the further con.servation of California petroleum 
and its products through a more extensive and efficient utilization of 
hydroelectric energy, both during the war and thereafter, has been 
carefully considered by us. The committee has had the benefit of two 
special reports dealing with the general problem, the one received fi-oni 
the Pacific Coast Section of the National Electric Light Association, 



171) 



KEI'OKT OF COMiMlTTKE OX I'ETKOLEIM. 



ovri- the .signature of Mr. II. F. Jackson, pi-esidciit. and tlie other from 
Mr. F. Emerson Hoar, uas and ehn-trieal engineer of the California 
(vaili-oad Commis-sion. 

The pr(»l)lem of conserving fnel through the .substitution of water 
power is not a new one in California and other Paeifie Coast States, as 
will be ai)parent from the faet that hydroeleeti'ie development in Cali- 
foi-nia ha.s increased 800 per cent in the last lifteen years. Tt is inter- 
esting to note that during the same period the production of petroleum 
incri^ased less than 700 per cent. 

The total installed capacity of existing hydroelectric plants in Cali- 
I'ornia. Washington, Oregon. Nevada and xVrizona is about 1,288,600 
horsepowei". of which 7:^1.000 horsepower, or iiii.S per cent, is in Cali- 
fornia. The cond)ined output of these hydroelectric pla.nts, if repro- 
duced by steam power, would require the aniuud expiMulitui'c of not less 
than 1!1.00(),000 barrels of fuel oil. 

The mininuim potential water power resource of California, according 
to estinuites made by the U. S. Geological Survey in 1908, as revised 
by the Commissioner of Corporations in 1912 and by the Secretary of 
Agriculture in Senate Document No. 316. Sixty-fourth Congress, first 
session, is 3.-124,000 horsepower, and the minimum combined resources 
of the five states mentioned is reported to be 12.619,000 horsepower, or 
45 per cent of the water power resources of the entire country. Of 
these potential resources, approximately one-third can be developed as 
re({uired at an average investment cost which will permit of succes-sful 
and profitable operation under present conditions of the M^estern power 
market. This infornuition, over a ten-year period, is shown in tabu- 
lated form, for fifteen years, from 1902 to 1917. segregated by states, 
in Table 31. 

TABLE 31. 

\\ titir I'ouir lin'sourcca uiid Ht/diorhxtric Dcvilvpincnt of J'tnifiv Voust l:^tutvs in 

Jlorseiiowcr. 



-M i II i 111 u 111 potential 
water power resources 
Kstiiiiated practical de- 
veloimients under 
present conditions ... 
installed capacity of 
liydroelectric plants— 

1902 

UK)7 

1912 

1917 (estimated) 



California 


Oregon 


Wasliington 


Nevada 


Arizona 


Total 


3,424.000 


3,148,000 


4,928,000 


172 000 


893,000 


12,619.100 


1,100,000 


950,000 


1,200,000 


20,000 


280,000 


3,550,0(11) 


91,656 
216,1.50 
440,243 
731.000 


31,089 
i:«,779 
16S,807 
176.800 


24,089 

67,714 

279,760 1 

333,600 


2,296 

6,812 

12,709 

13.500 


320 

934 

9,346 

33,700 


149,4.50 

430,389 

910.865 

1.288.600 



Thr vnsl watci- powci- resources of Califoi'nia and other states now 
cousuining Califoi-nia pcti'dleiini and its products are of particular 



171 

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(JONSKRNATION. 



171 



interest at this time because of the present critical situation aft'ectiuii;' the 
supply of liijuid fuels. The only relief, however, which may be antici- 
pated from this source durin<i: the war will come from a more complete 
;itul efficient utilization of existing hydroelectric capacity. y^ 

At the present time over 21,500 horsepower of developed hydro- 
electric plants in California are not available for use in tiie industrial 
fi^nters of the state, because of inadequate line capacities and lack of 
jiroper interconnections between the systems of the larger producing 
itnnpanies. The annual output capacity of this excels power is equiva- 
lent to about 668.500 barrels of fuel oil. In addition to the unavailable 
;i('tual excess capacity in hydroelectric plants of the individual com- 
panies operating in this state, the failure to take advantage of the 
diversity between the system peak loads of these various companies and 
the inability at the present time to utilize fully the stream flow at the 
.separate plants because of the lack of interconnections between the 
ijidividual transmission systems, represent a waste of electric energy, 
which is equivalent to not less than 1,100,000 barrels of fuel oil 
jumually. Adeciuate and proper interconnections between the larger 
independent transmission systems would remedy this situation. "X/ 

The present installed capacity of [)ublic utility and industrial steam 
l)ower plants in the five Pacific Coast states hereinbefore mentioned is 
about 1,729,600 horsepower, of which total approximately 804,900 horse- 
jiower is installed in CVdifornia. 

The i)reseiit fuel oil consiim[)tion of tiiese steam power plants is at 
llie rate of about 9,770,000 l)arrels \wv yeai", of which amount some 
:!. 950.000 barrels are consunu'd in (.alifornia outside of the oil fields. 

This infoi'mation in shown in Tal)le '^2. 



TABLE 32. 

!<(iuiii I'laiit InstnUiition in I'dvific Coast States. Public UtUiti( 
Estahlishmetits, in Horsepoicer. 



<ind I ndiinii ial 



Installed capacity 


California Oregon 


Washington 

140,110 
263,016 
393,276 
522,000 


Nevada 

1,156 
3,392 

8,808 
22,400 


Arizona 


Totals 


1902 

1907 


220,937 59,404 

397.986 114,132 

664.987 19a,112 
804,900 267,800 

i 


16,498 
34,973 

56,787 
112,500 


438,105 
813,499 


1912 

J917 (estimated) 


1,319,970 
1,729,600 



Railroads at thi^ present time consume approximately ;^8.996,000 
barrels of ('alifornia fuel oil per annum, of which amount about 24,- 
790,000 barrels are consumed by railroads in ('alifornia and other 
Pacific Coast states. 

in addition to the ])lants consuming (California fuel oil, stationary 
internal comljustioii engines are relatively larg(n' us(n"s of gasoline antl 
''.istillales, Tlic capacily of tticsc engines installed in mannracturing 



172 



Klil'OKT OF COMMITTEE ON PETROLEUM. 



estal)lislniients in the five Pacific Coast states is at the present time 
appj'oximately 17,980 horsepower. These iiistanations have decreased 
eontinnoiisly during; the last ten years, as sliown in Tal)le 33. 

TABLE 33. 

U(is and Oil Engine Installations in Pacific Coast States, Public Utilities and 
Industrial Establishments, in Horsepower. 



Installeil capacity 


California 


Oregon 


Washington 


Nevada 


Arizona 


Totals 


1902 

1907 -- -- 


10,111 
27,788 
13,832 
13,000 


475 

677 

906 

1,010 


1,218 
1,776 
1,764 
1,750 


262 

965 

1,266 

1,440 


2.120 

1,833 

1,115 

780 


14,186 
33,039 


1912 -- -■ 


18.883 


1917 (estimated) 


17,98(1 



While the greatest individual saving in fuel oil would be realized 
through the electrifieation of the mountain divisions of steam railroads 
in California over the Siskiyou, Sierra Nevada, and Tehachapi grades, 
tliis is a matter for the future rather than one which can be counted 
upon to relieve the present situation. Such a comprehensive plan for 
the substitution of hydroelectric energy for fuel oil could not be carried 
out immediately and the benefits resulting from such a change would, 
if immediate steps were taken to begin construction, not be realized 
for from two and a half to three years. The saving in fuel oil by the 
electrification of the mountain divisions of the jirincipal railroads would 
be from 3,200,000 to 3,800,000 barrels per year. The expense involved 
in making the change would be from $17,500,000 to $20,000,000. 

\'iewing the matter from a practical standpoint, the only early reliel' 
\\hi('li can be anticipated from a greater use of hydroelectric energy 
will result from the interconnection of the more important electric 
transmission systems, thus making usable a larger proportion of the 
available developed water power. This additional energy if utilized 
for power purposes, both in the steam plants and those of industrial 
users of fuel oil, will permit the almost immediate conservation of 
approximately 1,500,000 barrels of fuel oil per year. 

The substitution of electric power for that produced by internal 
combustion engines accessible to existing electric distribution lines in 
(-alifornia would, in all probability, effect an annual saving of about 
550,000 barrels of gasoline aiul engine distillate, but in order to full\ 
accomplish this result it woidd be necessar^^ to develop considerable 
fuUlitional power, which presumably will not be practicable during the 
war because of the impossilulity of obtaining prompt delivery of elec- 
trical equipment and the time required to develop hydroelectric 
jM'Dpcrties. 



CONSERVATION. 173 

E. Natural Gas. 

We have made iiuiuiry into the extent to which California fuel oil 
has been conserved by the substitution of natural gas and to the possi- 
bility for further conservation of California fuel oil by the same means. 

The committee has secured considerable data with reference to the 
natural gas situation in the various oil fields of California and in par- 
ticular has had the benefit of a special report on the subject of natural 
gas submitted by Mr. J. F. ^McMahon, of the Valley Natural Gas Com- 
pany, and associates, who made a special investigation, for the purpose 
of this report, into the conditions prevailing in each petroleum field in 
California. 

Natural gas occurs in the oil fields in two forms, dry gas, which is 
found alone in the strata containing it, and wet gas, M'hich is a>:soci- 
ated underground with petroleum and escapes to the surface along with 
the petroleum. The larger portion of natural gas which reaches a 
market in California at the present time is wet gas. 

California natural gas is utilized partly in the oil fields and partly in 
various sections of the state to which it is transmitted by pipe lines for 
sale for domestic and industrial purposes. A 12-inch pipe line, 111 
miles in length, having a maximum capacity of 23,000,000 cubic feet 
daily, conveys natural gas from the Midway field to the city of Los 
Angeles and surrounding communities. Natural gas from the Whittier- 
Fullerton field is used in Los Angeles County and in a large number of 
towns in Orange County. The Santa INIaria field supplies natural gas 
to seven or eight towns, including the city of San Luis Obispo. The 
Summerland field supplies a small quantity of natural gas for domestic 
consumption. In Kern County the towns of Maricopa, Taft and Fel- 
lows are served with natural gas and a pipe line having a length of 40 
miles transports natural gas from the Midway field for domestic and 
industrial consumption in Bakersfield. 

The characteristics of the various California oil fields with reference 
lo natural gas are as follows : 

Midway Field. 
This field supplies the largest amount of natural gas in California. 
Included in the field are the Buena Vista Hills, which contain Naval 
Reserve No. 2, the only large reservoir of dry gas thus far discovered 
in the California oil fields. The present production from the Buena 
Vista Hills field is about 90,000,000 cubic feet per day, of which 
amount about 40,000,000 cubic feet per day is dry gas. This gas has a 
high heating value and furnishes a large part of the gas distributed by 
Midway Gas Company and Valley Natural Gas Company. The main 
body of the Midway-Sunset field supplies approximately 10,000,000 
cubic feet of wet gas per day, all of which is used in the field with 



17-1: RKP(^RT OF roMMiTTEK o\ im:th()i,ki ■^r. 

llie exception of some t'oui- oi- five million feet whieh are lost. This 
loss repi'esents a small snrplns on many p]'oi)erties, so widely separated 
that its eonscrvation wonld not be connnefcially feasible. 

Ai)])roximately 20.0()(),()()() enbie feet of natural sjjas per day is poten- 
tially available in addition to that whieh is now being produced. This 
iias is pi'ineipally being produced on lands the title to which is in 
dispute with the federal government. Mr. McMahon reports that it 
would cost over ?|;2r)0.000 to install the equipment necessary to take care 
of the natural gas which is now being wasted from lands involved in 
governnuMit suits and that the oil companies hesitate to make such an 
investment in face of the possibility that they may her(>after lose 
the same. 

McKittrick Field. 

Only a small amount of natural gas is produced in this field. Tlie 
gas is all used locally, logctluT with about 500 barrels of crude oil daily. 

Belridge Field. 

Wet gas supplies all the fuel requirements of this field. This is the 
only field in the state in which no crude oil is burned. In addition to 
the wet gas in the field, the Belridge Oil C.-ompany has a dry gas well, 
at present closed in, which is reported to be capable of producing, 
8,000,000 cubic feet per day. J\lr. JMcMahon suggests the possibility 
of utilizing these 3,000,000 cubic feet per day to replace the .lOO barrels 
of crude oil which are being bunu'd daily at McKitti-ick. 

Lost Hills Field. 
This Held pi'oduces about 2,r)00,()00 cubic feet of gas i)er day, of 
which about 1,000,000 cu.bie feet have been wasting into the air. Com- 
pressors for pumping this gas are now being installed. "When they are 
completed appro.ximately one-half of the 250 barrels of crude oil which 
arc daily consumed in this ti(dd will be saved. 

Kern River Field. 
This field produces vei'\- littU' gas. all of which is utilized in the field. 
About 6,000.000 cubic feet of gas i)er day are conveyed to this field from 
ihe Midway field notwitiistanding which fact l.SOO barrels of fuel oil 
daily are reijuired in this field. 

Coalinga Field. 

'i'he i)roduetion of natural gas in this field comes largely from the 
properties of the Shell Company of California and of Kern Trading 
and Oil Company, which companies have taken active steps to conserve 
all the gas whicii is being produced. Appioximately one-half the pro- 
ducing wells in this field are pumped with gas engines. Electric motors 
are also largely used. Eighteen hundred barrels of crude oil per day 
are consumed in this field. Electric jxiwer may eventually save a con- 
sideral)lc portion of this i-rude oil. 



(,'()nsp:rvation. 17") 

Santa Maria Field. 

This field produces a considerable volume of natural ,L!:a,s, all of 
which is either utilized in the field or for donie.stie .serviee in Santa 
Maria, San Luis Obispo and other nearl)y towns. This field has ample 
(•ompressor eapaeity to care for increased quantities of natural ^^as and 
exeess sas may be transported to Ibe t'nion Oil Company at Avila, 
where ei'ude oil is now beinj;- burned. 

Ventura Field. 

Only a small amoiml of <;'as is now produeed in this field, bid Ihe 
|U()specfs of additional development are briji^ht. 

Whittier-Fullerton Field. 

This field I'anks second in the production of natural gas, being sur- 
])assed only by the ^lidway field. Of the estimated total daily produc- 
fion of 31,2r){),000 cubic feet, it is estimated that 17,000,f)()0 feet are 
nsed in the field, 6,000,000 for higher industrial uses and 3,000,000 for 
domestic use. The Soutliern Counties Gas Company distributes natural 
gas fi'om this field to a number of towns in Orange County and the 
iMidway CJas Company augmeiits its supply from the Midway field 
with about 8,000,000 cubic feet per day from the properties of the 
Standard Oil Company. Very little natural gas in this field is allowed 
to waste into the atmosi)here. 

Salt Lake Field. 
This field ])roduces abont ■i,600.000 cubic feet of gas daily. One- 
half of this i)roduction is utilized locally for fuel and about one-fourth 
is distributed in Los Angeles thi-ough the mains of the Economic 
(fas Company. 



ITfi 



REPORT OF COMMITTEE ON PETROLEUM. 



Table 34 shows tlio pi-oduc-tion and distribution of natural tjas in 
California as of June ], 1917, as reported by Mr. Mc^Iahon. 

TABLE 34. 

rruduciion and DiKtrihution of Natural Gas in California June 1. 1911, as Reported 

by Mr. J. F. McMahon. 



Field 


Estimated total avail- 
able daily production, 
June 1. 11117 
(M. cu. ft.) 


Fuel use displacing 
oil. field developments 
and operations 
(M. cu. ft.) 


Hipher Industrial use 
(M. cu. ft.) 




i| 


ill 

Hi 

"■» = 

if 


Surplus held as 
resene supply 
(M. cu. ft.) 


-Available by Installation 
additional compressors 
(M. cu. ft.) 


Midway-Sunset 


100,000 
1,000 
5,000 
2,500 
1,500 
9,200 

15,650 
2,000 

31,250 
4,600 


42,000 
600 

1,750 

900 

600 

6,000 

11,000 

1,500 

17,000 

2,600 


3,000 
300 
150 

400 

700 
3,000 
3,000 

300 
6,000 

500 


1 

17,003 
100 .- 


8,000 


10,000 


20 0D3 


McKittrick . __ 




Belridge 


100 -, 
200 - 




3,000 




Lost Hills* — 


i.oon 


Kern River . . . ... 


200 - 






Coalinga . 


200 L. 








Santa Maria .. 


1,650 ... 








Ventura _ 


200 ... 








Whittier-Fullerton _ _ .. 


3,000 
1,000 . 


1.000 


3.000 


1.250 

509 


Salt Lake 












Totals 


172,700 


83,950 


17.350 


23,650 


9,000 


16,000 

I 


22 75fl 







^Remarks: Compressors now being installed. 

Reports which we have received from all the oil companies of the 
>tate seem to indicate that the consumption of fuel oil in the oil fields 
is approximately 8,500 barrels daily. 

It is doubtful whether more than a small percentage of this remain- 
ing oil consumption in the fields ma,y be eliminated by the further 
use of natural gas. The most feasible possibility of such substitution 
which seems now to exist is the replacement with gas transported from 
the Belridge field of the 500 barrels of crude oil daily consumed in the 
]\IcKittrick field. 

We reach the following conclusions with reference to the natural gas 
situation in California: 

1. The production of natural gas has passed the peak and is now 
gradually declining. 

2. With the exception of a few isolated and unimportant instances, 
further conservation of natural gas in substantial quantities can be 
accomplished only on the properties which are now involved in litigation 
with the federal government. 

3. If the present rate of consumption of natural gas continues, addi- 
tional compressor capacity will gradually be required to overcome the 
•liniinishing pressures at which the gas will reach the surface. 






CONSERVATION. 177 

4. The most effective instrumentality for securing a decrease in oil 
consumption in the oil fields would seem to be the increased use of 
electric power and of internal combustion engines and not an increased 
consumption of natural gas. 

IV. ('oiiclusio)i. 
On the possibility of decreasing the consumption of California petro- 
leum and its products by the conservation thereof, we reach the 
following general conclusions : 

1. It is the duty of all users of California petroleum and its products 
to conserve the use thereof by every reasonable means, both during the 
war and thereafter. 

2. As soon as can reasonably be done, consistent with the maintenance 
of the efficiency of our transportation systems and other industries 
during the war, the further burning of unrefined petroleum should be 
I)revented. by governmental authority if necessary. 

3. Field losses of petroleum in the oil fields have lieeu reduced almost 
to a negligible amount. 

4. The increasing use of internal combustion engines and improved 
lefining processes will gradually bring about a higlier and more efficient 
use of petroleum and its products. 

T). Whether the u>e of gasoline by pleasure automobiles and unneces- 
sary jitneys shall be curtailed or abrogated is a ciuestion of national 
scope, to be decided by the federal government. 

(). ]\Iexican fuel oil can be substituted for the greater portion of the 
;5,()00,000 barrels of California fuel oil still sold on the west coast of 
Central and South America, but further than this can not be substi- 
tuted for California fuel oil during the war. 

7. Coal has recently been substituted for California fuel oil in the 
Northwest to the extent of 1,000,000 barrels of fuel oil annually and is 
l)eing substituted and can be further substituted to a limited extent on 
railroad locomotives operating in the vicinity of the coal fields of Wash- 
ington, the Rocky Mountain States and New Mexico, but further than 
this can not lie used as a substitute for Califoi-nia fuel oil during 
the war. 

8. Powdered coal is still in an experimental stage so far a,s railroad 
locomotives are concerned and can not be looked to as a sul)stitute for 
California fuel oil during the war. 

9. Hydroelectric energy has already been substituted extensively for 
power derived from California fuel oil and by interconnections between 
the systems of California hydroelectric companies can conserve fuel oil 
lieretofore used in steam plants of electric companies and be made avail- 
able to the extent of the surplus now existing. However, by reason 

12— 314(19 



178 REPORT OP COMMITTEE OX PETROLEUM. 

of the time necessary to dev^eloj) additional hydroelectric plants the 
Time necessary to convert the railroads and other industries to hydro- 
(>lectric energy and the expense and difficulty of securing material, no 
substantial saving of California fuel oil by the sul)stitution of hydro- 
electric energy can be anticipated during the war. 

10. Natural gas has presumably reached its maxinnnn production in 
the California oil fields and can not reasonably be looked to as a further 
substitute for California fuel oil during the war or thereafter. 

11. During the war not materially in excess of 5,000,000 additional 
barrels of California fuel oil can be conserved annually by the substitu- 
tion of other forms of fuel or power or by any of the other methods of 
conservation herein considered. As soon as possible, however, the users 
of California fuel oil must prepare to turn to other forms of fuel or 
power. 



I 



CHAPTER XII. 

CONCLUSIONS AND RECOMMENDATIONS. 

In this final chapter, Ave shall state our conchision.s on the facts of 
the California petroleum industry and shall mal^e such recommenda- 
tions as seem appropriate. 

I. Conclusions. 
1. Utilization. 

Far beyond the borders of California, her petroleum and its products 
play a vital part in commerce and industry. 

California fuel oil operates the Panama Canal ; the greater part of the 
steam railroads of Washington, Oregon, California, Nevada, Utah, 
Arizona and New Mexico; the steamship lines along the Pacific coast 
from IMexico to Alaska and across the ocean to Hawaii ; the artificial 
gas plants of California, Oregon, Washington, Nevada, Arizona and 
Hawaii ; the mines and smelters of California, Nevada and Arizona ; 
the cement plants and sugar refineries of California ; and a substantial 
portion of the manufacturing, industrial and agricultural enterprises 
of the Pacific Coast States of the Union. 

California fuel oil supplies the Pacific coast fuel requirements of the 
United States Navy and Army and of the various state and municipal 
governments. 

Radiating from California, north, west and south, California fuel 
oil, to a considerable extent, operates the railroads and industries of 
western Canada ; the sugar refineries and railroads of Hawaii ; and the 
railroads, steamship companies, minas and smelters of the west coast 
of Central and South America. 

The products of California petroleum, such as kerosene, gasoline, 
distillates, lubricants and road oils meet the requirements of Arizona, 
California, Nevada, Oregon, Washington, Alaska and Hawaii. Cali- 
fornia kerosene is shipped in enormous quantities to China, Japan, 
India and Australia and to the western coast of Central and South 
America. California distillates and lubricants are sold in nearly every 
important state of the United States, as well as in England, Canada 
and Australia. 

Important as is the part which California petroleum and its products 
have heretofore played in the industrial life of the nation during times of 
peace, much more important is the part which the state should play 
and will play, if possible, in meeting the emergency in the supply of 
fuel oil, gasoline and lubricants, created by the war. 



180 REPORT OF ("OMMTTTKE ON PETROl.EUM. 

2. Production. 

California i)rodiK'es bt'tweL'H oiit'-i'oiirth and uno-liftli of the world's 
supply- of petroleum. One-third of tlie entire .supply of the United 
States is produced in California. 

The year of California's greatest production was 1914, in which 
year 103,620,000 barrels were produced. Production fell in 1915 to 
89,570,000 barrels, and increased .slightly in 1916 to 91,820,000 barrels. 

Notwitlistanding the fact that a net average of 52 new wells was 
added to the producing wells of California during each month from 
January to May, 1917, inclusive, and the fact tliat drilling during 
tliese months was more active than during anj^ other period in the last 
three or four years, the daily production was slightly less in May than 
in January. 

Unless the measures hereinafter recommended for increasing pro- 
duction are adopted, it is improbable that the production in 1917 will 
exceed the 1916 production l\y more than 2,000,000 barrels, if at all. 

From the data available to us, we are convinced that the public can 
not hope for further substantial increases in California's annual petro- 
leimi supply by the discovery of important new fields or of large 
extensions of existing fields. 

3. Consumption. 

The consumption of California petroleum in 1916 wa.s 104,930,000 
barrels, being more than 13.100,000 l)arrels greater than the production. 
The excess was taken from storage. 

Consumption in 1916 outran production an avci-age of 1,100,000 
barrels per month and 35,650 barrels per day. 

During the first five months of 1917, consumption outran production 
5,415,000 barrels, being 1,083,000 barrels per month and 35.860 barrels 
per day. 

Due to normal increase in consumption as well as the additional 
extraordinary requirements of the war which are already being felt, it 
is doubtful whether consumption in 1917 can be reduced below the 
consumption of 1916, notwithstanding the substitution of other fuel or 
power and the further possibilities of conservation pointed out in this 
report. 

Consumers of California petroleum Avill .shortly face a condition 
of decreasing production and increasing demand. This condition points 
inevitably to the necessity of developing other sources of fuel or power. 

4. Storage. 

Crude oil stocks in California have fallen from 57,147,000 barrels 
on December 31, 1915, to 44,036,000 barrels on December 31, 1916. a 
reduction during the year of 13.110,000 barrels, or 23 per cent. 



CONCLUSIONS AND RECOMMENDATIONS. 181 

Standard Oil Company reports that during the first five months of 
1917 the field and pipe line crude oil stocks of all companies were 

further depleted as follows : 

_ 

storage 
1917 depletion 

in barrels 



January ' 976,036 

February 1,031,960 

March 854,333 

April 1,197.475 

May 1,355,318 



Total 5,415,122 

The total remaining storage on June 1, 1917, is reported to have 
been slightly in excess of 38.000,000 barrels. 

A portion of the crude oil in storage can not be utilized because it is 
located below the outlets of tanks and reservoirs or is being used for 
the operation of oil pipe lines or for other reasons. Of the total stocks 
on June 1, 1917, not in excess of 32,000,000 barrels were available for 
use. Of this amount, 12,000,000 barrels were refining oil and would 
yield approximately 7.000,000 barrels of residuum. On June 1, 1917, 
there were available from crude oil stocks approximately 27,000,000 
barrels for fuel. 

If the present excess of consumption over production, amounting to 
an average of 1,083.000 barrels per month, continues, the entire avail- 
able storage of California fuel oil will be exhausted by June 1, 1919. 

If a margin of safety of 10,000.000 barrels of fuel oil is maintained, 
and if the present relationship between production and consumption 
continues, the margin of safety for fuel oil will be reached by Septem- 
ber 20, 1918. 

If consumption is materially increased, as seems likely, both because 
of normally increased requirements, as well as the extraordinary 
retpiirements of the war, or if production decreases, as seems likely 
unless the relief herein recommended is given, both the margin of 
safety and the complete depletion of all California stocks will be reached 
considerably prior to the dates indicated. 

The principal railroads of California, with the exception of the 
Southern Pacific Company, have made the necessary arrangements to 
meet their requirements for at least one year. 

At the present rate of lU'oduction by Kern Trading and Oil Com- 
pany, the Southern Pacific Company's fuel oil bureau, bearing in mind 
also the purchase of fuel oil by the Southern Pacific Company, including 
1,000.000 barrels bought from Union Oil Company and not as yet drawn 



1S2 Uia'OKT OF COIMINHTTEE ON PKTKOIjEUM. 

on, and bearing in mind also the Southern Pacific Company's con- 
sumption of fuel oil, the Kern Trading and Oil Company's storage of 
fuel oil will be exhausted by December, 1917, unless the recently aug- 
mented drilling operations of Kern Trading and Oil Company increases 
ilie Southern Pacific Company's production and unless the Southern 
Pacific Company effects a substantial saving of fuel oil by converting 
to coal those portions of its system which are located in proximity to 
the coal fields of Washington, the Rocky Mountain States and New 
Mexico. If the receipts of fuel oil by the Southern Pacific Company 
decrease or its consumption inei-eases. the depletion of its stocks will 
occur before December 1, 1917. 

If the Kern Trading and Oil Company's storage should be exhausted, 
it would be necessary for Southern Pacific Company to enter the market 
to purchase oil from general stocks in storage, which amounted on 
June 1, 1917, to slightly over 38,000,000 barrels. These stocks are 
(iwned i)rincipally by Standard Oil Company and Union Oil Company. 
If these companies should be unwilling to sell to the railroads fuel oil 
from their storage, we assiune that the federal government would have 
the right to commandeer the stocks and to compel their delivery for 
the operation of the railroads as hmg as the stocks hold out. Such 
action, if on a large scale, would necessarily deprive other important 
industries of petroleum and its products. 

5. Conservation. 

Field losses of petroleum in the California fields have been almost 
entirely eliminated and the amount of fuel oil used in field drilling and 
pumping has been largely reduced by the substitution of natural gas and 
electric energy. The operators are now generally taking steps to reduce 
the remaining use of approximately 8,500 barrels of fuel oil daily by 
the installation of jacks and electric motors. The use of fuel oil in the 
fields for pumping and drilling can not be entirely eliminated. 

The principal petroleum refineries of California are working on 
improved processes of refining. The amount of crude oil which is being 
I'efined is increasing and a proportionally larger amount of gasoline 
;ind lubricants is also being secured. The result has been a large 
.snri)lus of kerosene which it has been necessary to export to the Orient, 
Australia and Central and South America. 

^lexican petroleum was substituted early in 1917 for California 
r)etroleum amounting to approximately 2,750,000 barrels annually, 
liei-etofore sold by T^nion Oil Company in Chili. A considerable portion 
"f the remaining 3,000,000 barrels of California fuel ofl sold in 1916 on 
tlie west coast of Central and South America, including the Panama 
Tanal, can likewise be saved by the substitution of Mexican petroleum 
from the fields of Tampico arid Tuxpam. By reason principally of 



CONCLUSIONS AND RECOMMENDATIONS. 183 

trausportation difficulties, jMexican petroleum will not be available, 
during the war, as a further substitute for more than 3 per cent of 
California petroleum. After the termination of the war and the 
resumption of normal transportation conditions, we may assume that 
Mexican petroleum will play an important part in the commerce and 
industry of a considerable portion of the Pacific coasts of North, Central 
and South America. 

Coal can not be substituted for California fuel oil to any substantial 
extent during the war because of present difficulties in the production 
and transportation of coal. Approximately 1,000.000 barrels of Cali- 
fornia fuel oil will be saved in the ensuing year in the Northwest by the 
substitution of coal for California fuel oil by the Oregon Short Line 
and other industries. The Los Angeles and Salt Lake Railroad Com- 
pany and The Western Pacific Railroad Company are converting a 
portion of their systems in Utah and Nevada from California fuel oil 
to coal produced in the Rocky Mountain States. The Southern Pacific 
Company and The Atchison, Topeka and Santa Fe Railway Company 
can also gradually convert from fuel oil to coal those portions of their 
systems which are in proximity to the coal fields of the Northwest, the 
Rocky Mountain States and New Mexico. Apart from what has already 
been accomplished and the further possibilities herein indicated, there 
is little possibility of further conversion from California fuel oil to coal 
during the war, unless the conditions surrounding the production and 
transportation of coal materially change. 

Powdered coal has been successfully used in cement plants, stationary 
boilers or power plants and metallurgical furnaces. One cement plant 
in the Northwest has recently converted its plant from California fuel 
oil to powdered coal, resulting in a saving of 84,000 barrels of California 
fuel oil annually. Apart from a possible slight additional saving in 
the Northwest, it is not reasonable to expect that powdered coal will be 
further substituted for California fuel oil during the war. 

Hydroelectric energy has already been substituted to a considerable 
extent for California fuel oil in industrial and agricultural uses, but 
the difficulty in securing copper and other material and the disturbance 
of existing conditions are such that large additional savings of Cali- 
fornia fuel oil by the substitution of hydroelectric energy can not be 
anticipated during the war. A small saving of California fuel oil can 
be effected, during the war, by the further substitution of electric motors 
for fuel oil in the California oil fields and by such interconnection 
between the systems of various electric companies as will eliminate or 
reduce the necessity of maintaining steam electric plants. After the 
termination of the war and the restoration of normal industrial condi- 
tions, we may expect that hydroelectric energy will play an increasingly 



lt>-J: REPORT OF COMMITTEE ON PETROLEUM. 

important part as a substitute for fuel oil in all the Pacific Coast States 
in which such energy is available. 

Natural gas has already been substituted to almost the entire extent 
of its suppl}', for fuel oil in the California petroleum fields, and for 
fuel oil and artificial gas for higher industrial and domestic uses. The 
maximum production of natural gas in the California petroleum fields 
has been reached and will shortly decline so that it is not to be antici- 
pated that natural gas will, to any substantial extent, further replace 
ether forms of fuel. 

We conclude that during the war some further saving of California 
fuel oil is possible by elimination of losses and substitution of other 
forms of fuel or power, but that no large saving can be effected without 
very serious impairment to the efficiency of the transportation systems 
and industries of the Pacific coast. 

The great importance of gasoline and lubricants must be recognized 
and steps should be taken as soon as reasonably possible to the end that 
no more unrefined petroleum is burned by any railroad company or 
other industry. No part of California petroleum should be thus burned 
except the residuum left after refining. 

If a sufficient amount of fuel oil can not be secured from Mexico after 
the war, the railroads and other industries of the Pacific coast must 
gradually make arrangements to use other forms of energy, such as 
hydroelectric energj' or powdered coal. 

6. The Remedy. 

The remedy which imperatively presents itself in view of the emer- 
gency created bj'^ the war is the prompt and substantial increase in the 
production of California petroleum. 

AVhile we do not desire to minimize the results which can be accom- 
plished and should be accomplished by the further diminution of field 
losses, the higher use of petroleum and its products and the substitution 
cf other forms of fuel or power, during the war as well a.s thereafter, 
the cardinal fact remains that the only means which will be effective 
in a large way to meet the present emergency is a prompt, substantial 
increase in production. 

We estimate that this increased production should amount to more 
than 85.000 barrels per day and that such increased production can not 
reasonably be expected before June 1, 1918. 

Each difficulty standing in the way of prompt and substantial 
increased production must be quickly solved, if the increase is to fore- 
stall a serious industrial crisis. 

7. Increased Production — Material. 

The necessary increased production can not be secured unless large 
ulditional amounts of oil Avell casing, drill stem pipe and other oil well 
material are promptly brought into California. 



CONCLUSIONS AND RECOMMENDATIONS. 185 

The oil well supply houses report that they can fill no orders for 
complete drilling outfits in addition to those already taken. 

The larger oil companies have on hand or have heretofore placed 
orders for enough material to complete their 1917 drilling operations 
as heretofore planned, but no material for additional drilling beyond 
such plans. Many small operators report that they would drill if they 
could secure the necessary material, but that it has been impossible for 
them to secure such material, even at the high prices now prevailing. 

Receiver Payne reports that he is willing to drill, if authorized by 
the federal court, but that he does not know where he could secure the 
necessary material unless the federal government should take the neces- 
sary steps to assist the California producers. 

In our opinion, the only way to meet the situation, in view of the 
existing conditions, is to have the federal government direct the manu- 
facturers of oil wtU supplies to devote sufficient capacity of their 
plants to supply the requirements of oil producers in California and 
other sections of the United States and to direct the railroads to trans- 
port such supplies promptly. 

8. Increased Production — Labor. 

Over 80 per cent of the laborers who are employed in the oil fields 
and refineries are skilled men, most of whom it would be difficult to 
replace. If any considerable number of these men are taken from their 
present employment it will be impossible to increase the production 
of petroleum in California and difficult even to maintain the present 
production. 

About 3 per cent of these men have already- left their employment and 
have volunteered for service in the various branches of the Army and 
Xavy. About 32 per cent of these employees have registered for the 
draft. 

We suggest the advisability of drawing this situation to the attention 
of the federal government. 

9. Increased Production — The Land. 

In order to secure an increase of 35,000 barrels per day in the pro- 
duction of California petroleum, drilling must be done on the land 
which will yield the largest production in the shortest time by the 
expenditure of the smallest amount of drilling material and labor. 

In Chapter X of this report we have presented the salient facts 
regarding the productivity of the petroleum lands of the state, together 
with our conclusions as to where the land most available for prompt 
increased production is located. We conclude that such lands are 
located in order of productivity with due regard to time and economy of 
drilling material in (1) the Buena Vista Hills (Midway field), (2) the 



J 80 KKPOHT OF COMMITTEE ON PETROLEUM. 

Coyote Hills and La Meived fields (Whittier-Fullerton field), (3) th(! 
Sunset field, and (4) the East Coalinga field. 

Of tlie most desirable undrilled lands, approximately 70 per cent are 
involved in litigation with the federal government. Nearly one-half of 
the best undrilled proved petroleum lands of the state are claimed by 
Kern Trading and Oil Company, the fuel oil bureau of the Southern 
Pacific Company, under patents heretofore issued to Southern Pacific 
Eailroad Companj'. Of the remaining lands in litigation, a part of the 
most productive undrilled land is in the possession of Howard M. Payne, 
federal receiver. 

The most promising land in the Coyote Hills and La jMerced fields is 
owned by Standard Oil Company and partly by Union Oil Company. 
This land is not involved in litigation. The wells in this district, 
however, are much deeper than in the Midway field and the limits of 
the productive territory have not as yet been thoroughly proved. 

The desirable Buena Vista Hills lands are practically all located in 
Naval Reserve No. 2. A considerable area, however, of presumably 
productive undrilled proved land, Avhich in our judgment should be 
promptly and intensively drilled, is located in the Sunset field and in 
the east Coalinga field. The larger portion of these lands is claimed 
by Kern Trading and Oil Company. A portion of them, situated in 
the Sunset field, is in the possession of the federal receiver. These 
latter lands, in our judgment, should be promptly drilled, not merely 
because of the large production which can presumably be secured 
therefrom, but also because water is knoAvn to be encroaching on them 
and probably will ruin them in large measure unless they are promptly 
drilled. 

The oil companies which own undisputed patented lands of presumed 
heavy productivity are under a grave responsibility to increase pro- 
iluction in the present emergenc3^ With the possible exception of one 
of the large companies, we are of the opinion that these oil companies 
are striving earnestly to meet this responsibility. Some operators are 
drilling wells which entail the expenditure of large amounts of material 
and labor for a relatively small production. 

A review of the situation shows that the present emergency can not 
be met without the assistance of the federal government. 

We shall not undertake to pass judgment on the broad questions of 
governmental policy M'hich might be affected by further intensive 
drilling in Naval Reserve No. 2. These questions must be left to the 
wisdom and the justice of the federal government when the government 
is in possession of all the facts, among which facts should be included 
the past and present drilling operations which have been and are now 
being carried on in this reserve, the effect of such drilling on the amount 



CONCLUSIONS AND RECOMMENDATIONS. 187 

and availability of the remaining oil content of the reserve, the produc- 
tivity and availability of the lands in the reserve as compared with all 
other oil lands in the state, and the extent of the present emergency 
as contrasted with the possible future needs of the nation. 

AVe desire, however, to direct attention emphatically to the fact that 
a considerable portion of proved productive territory, hitherto undrilled, 
is located outside of the naval reserves ; that further development of 
most of this land has been stopped by litigation with the federal govern- 
ment; that the policy of the federal government which has resulted in 
tlie creation of Naval Reserves Nos. 1 and 2 can have no possible appli- 
cation to these lands which are not claimed or needed for the Navy, and 
that with the help of the federal government substantially increased 
production can be secured from these lands. 

AVe desire, further, to draw attention to the fact that unless the 
federal government can bring about most radical changes in the supply 
of drilling material, the transpoi'tation of petroleum and the develop- 
ment of the land, the increased production of over 30,000 barrels per 
(lay, which in our judgment is necessary, can not be secured without 
some additional drilling in Naval Reserve No. 2. 

After a careful review of the entire situation and conferences with 
all interested parties, we have reached the following conclusions with 
reference to production on the lands now in litigation outside of the 
naval reserves : 

(1) As to the lands not in the possession of the federal receiver, 
being largely lands claimed by Kern Trading and Oil Company 
(►Southern Pacific Company), we conclude that joint action should at 
once be taken by the federal government and the claimants to such 
lands to petition the federal court to permit the claimants to drill 
intensively under some equitable arrangement by which both the federal 
government and the claimants will be protected, the federal govern- 
ment to be protected as to the value of the petroleum extracted in case 
the government should win the litigation and the claimants to be pro- 
tected to the extent at least of their expenditures incurred under such 
stipulation.s in case they .should lose the litigation. 

(2) As to the lands in the pos.session of the federal receiver, we con- 
t'lude that the receiver should be promptly permitted or directed by 
the federal court, of which he is an officer, to drill additional wells in 
such territory as gives promises of substantially increased production. 
If the authority of the federal congress is necessary to authorize the 
receiver to use for this purpose funds now in his hands or hereafter 
acquired, we conclude that the neces.sary legislation should be speedily 
enacted. 



188 KKl'OKT OF COIMMITTEE ON PETROLEUM. 

10. Increased Production — Transportation. 

When tlie conversion of the Standard Oil Company's six-inch pipe 
lino from the Whittier-FuUerton field to the refinery at El Segundo to 
a ten-inch line has been completed, the oil pipe lines of California, if 
properly administered and correlated, will be sufficient to take care of 
the pipe line transportation of such increased production as may rea- 
sonably be anticipated. 

The legislature of California has declared that oil pipe lines are 
common carriers and are subject to the jurisdiction of the Railroad 
Conniiission. The question Avhether the oil pipe line statutes are con- 
stitutional has been submitted to the Supreme Court of the state of 
California. If the legislation is sustained, the Railroad Commission 
will have authority to supervise the oil pipe lines so that they may be 
operated to their greatest efficiency from the point of view of the entire 
transportation situation. If the jurisdiction of the Railroad Commis- 
sion is not sustained, some other means must be provided so tiiat the 
oil pipe lines may be operated to full efficiency in the present emergency. 

A more efficient correlation of the use of oil pipe lines, railroad tank 
cars and tank steamers would result in the release of a considerable 
number of railroad tank cars, which are badly needed to serve the 
industrial needs of California and neighboring states. Standard Oil 
Company reports that it is 3,500 tank cars short at its refinery at El 
Segundo and that it is accordingly unable to fill urgent orders from 
the copper mines of Arizona! 

Increased transportation facilities may hereafter become necessary if 
the oil fields of southern California should be called upon, from their 
surplus production, to help meet the requirements of central and north- 
ern California and other territory. 

II. 1\'( co)inu()i(l(ill()iis. 
We respectfully submit the following reconniiendations : 

Recommendation No. 1. 

Increased Production. 

We recommend that every reasonable effort be made to increase the 
production of California petroleum pi-omptly and that to this end 
additional drilling be undertaken, as quickly as material and labor are 
available, on the lands on which the largest additional production can 
be developed in the least time and with the smallest expenditure of 
material and labor. 



conclusions and recommendations. 189 

Recommendation No. 2. 

Decreased Consumption. 

We recommend that every reasonable effort be made, consistent with 
the maintenance of the efficiency of our transportation systems and 
industries, to conserve the supply of California petroleum by the 
diminution of field losses, the higher use of petroleum and its products, 
and the su])stitutioii of othei- forms of fuel or power. 

Recommendation No. 3. 

Presentation of Facts to Federal Government. 

We recommend that the facts with reference to the California 
petroleum situation, including specifically the imperative necessity for 
additional production and the relative productivity of undrilled but 
proved lands, be presented to the President of the United States and to 
the appropriate departments of the federal government and that the 
federal government be respectfully urged to render every assistance 
which the government can render consistent witli the highest public 
interest. 

Recommendation No. 4. 

Oil Well Material. 
We recommend that the attention of the federal government be 
respectfully drawn to the advisability of directing the manufacturers of 
oil well supplies to set aside sufficient capacity of their plants for the 
production of oil well easing, drill stems, wire cables and other material 
to supply the reasonable requirements of California and other sections 
of the United States and of directing the railroads to transport such 
supplies as expeditiously as is consistent with other urgent requirements. 

Recommendation No. 5. 

Labor. 

We recommend that the attention of the federal government be 
respectfully drawn to the advisal)ility of exempting from service in the 
armed forces of the nation all skilled workmen employed in the petro- 
leum industry and of indicating to such workmen that their highest 
present duty is to assist in the maintenance and development of the 
petroleum industry. 

Recommendation No. 6. 

Lands in Litigation Where No Receiver. 

We recommend that the federal government be respectfully requested, 
in those instances in which California petroleum lands now in litigation 
with the federal government are not in the hands of the federal 



190 RKPORT OF COMMITTEE ON PETROLEl'M. 

receiver, to consent, throngh the Department of Justice, to .stipula- 
tions under whicli the claimants will be permitted to drill such lands 
intensive!}' under an arrangement by which the federal government, 
if it ultimately wins the suits, will be protected Avith reference to the 
petroleum thus produced, and the operators will be protected, if they 
lose the suits, out of the proceeds of the petroleum thus produced to 
the extent of at least their expenditures reasonably and fairly made 
under the stipulation. 

Whether any additional drilling shall be done on lands in Naval 
Reserve No. 2, is a matter which must be left to the wisdom and fairness 
of the federal government, when the government has before it all the 
facts, including the needs of the government, present and future, the 
extent and the effect of the past and present production in this reserve, 
the urgent necessity for increased production of California petroleum, 
the relative productivity and availability of undrilled proved lands, and 
the fact that on any reasonable assumption an additional production of 
more than 35,000 barrels per day can not be secured unless some addi- 
tional drilling is done in Naval Reserve No. 2. 

We earnestly recommend, how^ever, that pending a determination as 
to additional drilling in Naval Reserve No. 2, all other California petro- 
leum lands in litigation be at once thrown open to production under the 
arrangements herein suggested. 

Recommendation No. 7. 

Lands in Litigation in Possession of Receiver. 

We recommend that the federal government be respectfully requested, 
in those instances in which California petroleum lands now in litigation 
wdth the federal government are in possession of the federal receiver, 
to take appropriate proceedings, through the Department of Justice, 
so that the receiver may be authorized or directed to proceed at once 
to drill intensively such lands as arc presumptively productive and par- 
ticularly the lands which are likely to suffer from the infiltration of 
water, unless drilled. 

If the authority of congress is necessary, w'e recommend that congress 
he respectfully re(iuested to enact the necessary legislation. 

Recommendation No. 8. 

Legislation to Open Petroleum Lands 
We reconniiend that the federal government be respectfully requested 
to enact promptly legislation by which such lands in the public domain 
;is the federal government may consider wise and consistent with public 
interest Avill be opened to petroleum development on terms just and 
icasona))le botli to the f(Hleral government and to such explorers and 



CONCLUSIONS AND RECOMMENDATIONS. 191 

operators as have heretofore proceeded or may hereafter proceed in 
good faith to the exploration and development of petroleum lands. 
We suggest that the area of the lands in each in.stance be sufficiently 
large to permit efficient operation. 

We believe that the establishment of a definite constructive policy in 
this matter will have a wholesome and stimulating effect on the petro- 
leum industry of California and other states. 

Recommendation No. 9. 

Transportation. 
We recommend that the railroad, steamship, oil pipe line and oil 
pompanies of California be authorized and directed to take steps imme- 
diately to so correlate their respective transportation facilities as to 
make most available and efficient every agency employed in the trans- 
nnvf-ifion of California petroleum and its products. 

Recommendation No. 10. 

Ultinnate Conservation. 
AVe recommend that as soon as reasonably possible, liearing in mind 
the paramount necessity of the most et¥icient operation of our trans- 
portation systems and other industries during the emergency created 
by the war, the further burning of California petroleum, unless it has 
first been refined, be prevented, the higher use of California petroleum 
and its products insured, substitute forms of fuel or power developed, 
and the supply of California petroleum by the most efficient use thereof 
conserved. 



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45 ^ 92 



/ 




HECKMAN IJ^ 

BINDERY INC. |§| 

^^ OCT 92 

"^J5l=B^ N. MANCHESTER, 
INDIANA 46962 






